Global bond yields hit 2008 highs, raising stakes for big borrowers
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Re: Global bond yields hit 2008 highs, raising stakes for big borrowers
#2Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.
Re: Global bond yields hit 2008 highs, raising stakes for big borrowers
#3"I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody."
- James Carville
Re: Global bond yields hit 2008 highs, raising stakes for big borrowers
#4Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.
It isn't the debt levels that are causing the rates to spike, rather the start of the emerging Bretton Woods III era.
Re: Global bond yields hit 2008 highs, raising stakes for big borrowers
#5Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.
And the incredible thing is that yields are quite low based on historical standards. The risk of lending to most countries at yields that are barely above real inflation is massive for portfolio growth.
Let's take the US, where you have to consider lending money to the government for 10 years at 5.009%. This barely covers inflation if you consider real numbers rather than the financial fiction ones that have been published in the last 10-20 years.
In the 90s, an era of relative prosperity when the US was the sole remaining superpower, 5-year treasuries were paying 7-9% with inflation in the 2-4% range!
Re: Global bond yields hit 2008 highs, raising stakes for big borrowers
#6The war(s), especially with the impact on pipelines and the Houthis taking over more of Yemen, are finally affecting fuel prices and hence turning the global economic outlook less positive.
You can print money, but you can only ""print"" oil for a short time from reserves, which the US and China have been draining.
Re: Global bond yields hit 2008 highs, raising stakes for big borrowers
#7Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.
Working is an interesting term (which I agree with btw) because place like Japan with debt at 200%+ of gdp, rates rising are going to annihilate spending in other important areas.
Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?
Re: Global bond yields hit 2008 highs, raising stakes for big borrowers
#8Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.
Working is an interesting term (which I agree with btw) because place like Japan with debt at 200%+ of gdp, rates rising are going to annihilate spending in other important areas. Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?
> Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?
Who could you vote for, in any democracy, that would fit this?
Also, how many voters would have the wherewithal to identify such a person?
Re: Global bond yields hit 2008 highs, raising stakes for big borrowers
#9The war(s), especially with the impact on pipelines and the Houthis taking over more of Yemen, are finally affecting fuel prices and hence turning the global economic outlook less positive. You can print money, but you can only ""print"" oil for a short time from reserves, which the US and China have been draining.
> You can print money, but you can only ""print"" oil for a short time from reserves, which the US and China have been draining.
What's different between the two is that apparently China hasn't made an equivalent dent in its oil reserves, despite no significant reduction in travel, and despite reducing its import demand by 1 OPEC.
It's not entirely clear how - but theories include shifts from flights to train travel and shifts from gasoline cars to EVs.
Apparently the main reason they have started buying crude again is not for internal consumption as much as taking advantage of the massive crack spread in refined petroleum products (like diesel) which they export.
Re: Global bond yields hit 2008 highs, raising stakes for big borrowers
#10Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.
There is 0 risk to getting repaid from the US. We will print for the lenders the exact amount they are promised.
Promises kept. All is good