Monday, October 20, 2014

The Bond Market is manipulated by Central Bank Buying of Government Debt

HAI: The strength in the bond market has surprised a lot of people. We're seeing record-low interest rates for German and other European bonds. And even in the U.S., the 10-year yield is now hitting a new low for the year. Why are investors buying these bonds?

Marc Faber: The bond market is manipulated by central bank buying of government debt. Yields are lower than they would otherwise be if the Fed and other central banks didn't buy them. Secondly, the decline in yields may be a sign that bonds buyers don't believe in the global recovery story when it comes to the economy. In fact, the low yields on bonds would suggest that we may be entering a period of deflation. - in HardAssetsInvestor Oct. 13, 2014

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.

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