Tuesday, Mar 10, 2009
Gilts...
Telegraph: Inflation will kill the gilt rally in the end
Telegraph warns of coming problems with gilts. That the government is printing for expenditure is out in the open. The conclusion from the author is to stick to inflation-linked, however, can the government cover inflation-linked debt? They can't cover those with printing during an inflationary spiral, possibly they can be creative with inflation measurements. The BoE must be congratulated on their attempts to induce inflationary expectations.
Posted by stillthinking @ 05:17 PM (432 views) Add Comment
2 Comments
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1. Mrb said...
This is a pretty feeble analysis of the situation in the guilts market.
The Zimbabwe comparison doesnt work, at there is no such thing as credit in Zimbabwe. All Zimbabwian printing leads inflation, in UK / US the collapsing value of credit is of much more significance.
The bond bull market in the great depression ran from 1921 to 1941 and it fizzled witha whimper, not a bang.
2. bellwether said...
The comment by the author that the QE might turn the recession round is surely ridiculous, the psychology that allows people to borrow and spend without a thought for tomorrow is broken as is the system that underpinned the expansion. This seems about the only obvious element right now.