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Free Money In Bond Markets Shows Global Economy Still Struggling

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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.

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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!!!

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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.

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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)

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  • 407 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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