Central Banks Are Now Cornered
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Title : Central Banks Are Now Cornered
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Title : Central Banks Are Now Cornered
link : Central Banks Are Now Cornered
news-today.world | Central Banks are in VERY serious trouble.
By creating a bubble in sovereign bonds, which I call The Everything Bubble, they were hoping to corner all risk.
The problem with this, is that in order to create this bubble, they had to print trillions of dollars worth of money and use this money to buy bonds. And that money printing (now to the tune of $15 trillion) has unleashed inflation.
Why is this a problem?
Because inflation makes bond prices FALL as bond yields rise to accommodate the higher inflation rate. And when bond prices fall, the bond bubble bursts.
Take a look at high yield/junk bonds. We’re right at the bull market trendline.
More
By creating a bubble in sovereign bonds, which I call The Everything Bubble, they were hoping to corner all risk.
The problem with this, is that in order to create this bubble, they had to print trillions of dollars worth of money and use this money to buy bonds. And that money printing (now to the tune of $15 trillion) has unleashed inflation.
Why is this a problem?
Because inflation makes bond prices FALL as bond yields rise to accommodate the higher inflation rate. And when bond prices fall, the bond bubble bursts.
Take a look at high yield/junk bonds. We’re right at the bull market trendline.
More
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You are now reading the article Central Banks Are Now Cornered With link address https://newstoday-ok.blogspot.com/2017/10/central-banks-are-now-cornered.html