The truth is the U.S. and the EU are two examples of countries living beyond their means. And now China's being forced to confront that prospect.
Nothing has changed. What little austerity happened it was way too little and most probably way too late. So the same old beat goes on with nothing really corrected or changed. If anything it's not only more of the same but more of the same only worse. Here's just one side effect of these low and negative interest rates.
Bonds were once marketed as providing some downside protection from sinking equity prices owing to there dependable yields. Sure their prices go down with rising interest rates, but for some there was the possibility of higher yields and some upside when rates went back down again. It is called total return or rerun to maturity.
The psychological effects of holding negative yield sovereign debt that keeps dropping in value will be interesting to watch.
businessinsider.com/goldman-bonds-make-less-effective-hedges-2016-6
Nothing has changed. What little austerity happened it was way too little and most probably way too late. So the same old beat goes on with nothing really corrected or changed. If anything it's not only more of the same but more of the same only worse. Here's just one side effect of these low and negative interest rates.
Bonds were once marketed as providing some downside protection from sinking equity prices owing to there dependable yields. Sure their prices go down with rising interest rates, but for some there was the possibility of higher yields and some upside when rates went back down again. It is called total return or rerun to maturity.
The psychological effects of holding negative yield sovereign debt that keeps dropping in value will be interesting to watch.
businessinsider.com/goldman-bonds-make-less-effective-hedges-2016-6
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