Bond Yields Reverse After Hitting 5,000 Year Low

12.12.2016 • Politics and War

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By Tim Price – The Price Report (Great Britain) –

I warned in the last issue that the bond market was a thing best avoided by any rational investor. Coming off what were already 5,000 year lows, bond yields had already started to rise during the summer months this year in response to evidence of more robust economic activity and concomitant higher commodity prices. But the “shock” election of Donald Trump, with all the attendant expectations of tax cuts and infrastructure spending, has sent government bond yields soaring, all over the world. My take? A bond bull market of over 30 years’ standing is now probably over. If that’s true, it has some profound implications for all financial assets.

Once again, “the establishment” turned its tin ear to the rising howl of popular outrage – and, as with Brexit, got roundly slapped in the face for doing so. The best analysis I have read of the failings of the commentariat in the US comes from Rolling Stone journalist Matt Taibbi, who once described the investment bank Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jabbing its blood funnel into anything that smells like money”.

It says a great deal about our dysfunctional times and the quality of financial journalism today that the most trenchant commentary on political and economic matters comes, not from the pages of the Financial Times or The Economist, but from the pages of Rolling Stone. (Through the good offices of former bond salesman Michael Lewis, it also appears in the pages of Vanity Fair.)

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