Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Free Money In Bond Markets Shows Global Economy Still Struggling

Recommended Posts

http://www.bloomberg.com/news/2015-01-06/free-money-in-bond-markets-shows-global-economy-still-struggling.html

The world’s richest nations are borrowing for free.

Taken together, the average 10-year bond yield of the U.S., Japan and Germany has dropped below 1 percent for the first time ever, according to Steven Englander, global head of G-10 foreign-exchange strategy at Citigroup Inc.

That’s not good news. The rock-bottom rates, which fall below zero when inflation is taken into account, show “that investors think we are going nowhere for a long time,” Englander wrote in a report yesterday.

If the global economy was picking up, then bond yields would reflect expectations that inflation would accelerate and riskier assets would prove more attractive. Instead, inflation is on the slide. JPMorgan Chase & Co. forecasts a global rate as low as 1 percent if oil remains below $60 a barrel.

Even during the Great Depression, governments in the U.S. and abroad paid more than now to borrow for a decade, Englander says. At the end of the crisis-roiled 2008, the so-called Group of Three’s rate was still above 2 percent.

..

Even during the Great Depression, governments in the U.S. and abroad paid more than now to borrow for a decade, Englander says. At the end of the crisis-roiled 2008, the so-called Group of Three’s rate was still above 2 percent.

It's even worse/better than the Great Depression!!!

Share this post


Link to post
Share on other sites

It's the abolition of pensions! With old-fashioned annuities backed by government bonds, this reflects the breakdown of the pension system as we knew it. And those retiring today (i.e. boomers) getting virtually nothing for years of saving unless they're prepared to take much bigger risks.

Share this post


Link to post
Share on other sites

It's the abolition of pensions! With old-fashioned annuities backed by government bonds, this reflects the breakdown of the pension system as we knew it. And those retiring today (i.e. boomers) getting virtually nothing for years of saving unless they're prepared to take much bigger risk

Well they get their savings, in a zero inflation environment that is not too bad. The projections of 6% compounded don't look too likely (my pension provider still does this)

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   209 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.