Debt trading is a warning to Money

The author is the President of Queens’ College, Cambridge and a consultant for Allianz and Gramercy

The combination of the low-yield and strong U.S. yields has baffled many market regulators for some time now, as well as challenging social economic analysis.

This has made the harvest a lot more exciting in the last few weeks, bringing with it interesting questions in the markets, facts and global economy.

It is the practice of identifying the yields that the government offers to the US as the most important market in the world. Traditionally, they have demonstrated the prospects for economic growth and decline in the world’s most powerful economy. It has become the basis for prices in many other markets around the world.

Historically, these strategic parameters have deteriorated in recent years from economic and prospects. Their temporary connection to other assets, including stocks, ended.

And what they write is confusing and useless. In the wake of the 2008 global financial crisis, this was said to be due to the high cost of sustainability.

Over time, it became clear that the main driver was the complete and easy procurement of the world’s most powerful governments and banks in reducing spending, especially the US Federal Reserve and the European Central Bank.

One should not underestimate the power of central banks that intervene in market prices.

The billions of dollars traded by the Fed and the ECB have disrupted both markets and encouraged many to buy more than they can afford on a regular basis.

Apart from that, the main guarantee is a large bank with fully equipped printing presses and the ability to purchase goods in non-commercial areas. Such purchases allow for the return of the old business secrets and provide a guarantee that there will be ready buyers who will be required to resell their shares.

It is an institution that encourages private corporations to “lead” purchases with central banks at prices that often seem unattractive. It is not surprising that even those who believe that high commodity prices have been skeptical of being part of the retail market controlled by central banks.

While this is still the case, yields have steadily but steadily shifted over the past two weeks from 1.30% over 10 years to 1.50%.

With the prospect of global slowdown due to Delta’s Covid-19 divergence, operators have been plagued by rising prices and increasing signals that central banks have struggled to keep up with “QE ​​infinity” – that is, the economy. Symptoms in recent days have also been included sentences From the Bank of England and the high prices in Norway in addition to what is happening in other developing countries.

The more volatile the more, the greater the risk of sudden yields being “broken” to the surface because we have started with a combination of very small yields and a single market living space. Rising growth is also increasing, increasing market risk and economic stability, as well as greater economic risk – combined with rising inflation and declining economy.

Like a ball dipped in water, a combination of market risk and psychological error can lead to an increase in yields that can be difficult for many.

More importantly, this does not mean that central banks, as well as the Fed in particular, should delay what they should have already started – that is, launching what is, surprisingly, the same monthly rate ($ 120bn) as the Covid-19 emergency 18 months ago.

Instead, as Money waited, markets would begin to question its understanding of the complexities of inflation, adding to the risks of drug market changes that hinder recovery that should be robust, inclusive and stable.

For them, women need to realize that the huge gains in the financial costs of temporary restitution to the central bank are coming as a result of possible housing collapse and unintended consequences. Of course, they just have to look at how difficult it has been to find reliable alternatives that help to follow the old mix of what can restore and reduce risk.

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