Elz, Australians have been pulling their money out of equities...

Elz,

Australians have been pulling their money out of equities and putting it into term deposits (growing at a rate of 15%pa). Which is silly on two counts... (1) Foreigners are now approaching 50% ownership of the Australian market. (2) The ratio of term deposits to physical currency has never been higher. What's going to happen when depositors want to reconvert their deposits into currency? Their is currently $28 in deposits for every $1 of currency... that's a high level of leverage in the system and cannot be sustainable. Either, depositors get wiped out (can only claim 3.5c for every dollar deposited); or thanks to the Government guarantee, over time lose 96.5% of their purchasing power.