Thursday, January 8, 2009

The Debts of the Spenders: G7 Floods Bond Markets w/Massive Supply

VROOM! You hear that sound? That is the noise the US Treasury makes as it sucks up the world's liquidity in the global bond and fixed income markets. As I said before in earlier articles, there can be only one quantitative easing beast in the world - and that is the USA. Other issuers, no matter how "safe" their secured status, are forced to raise yields in order to entice borrowers to pick up the slack. Let alone even try native QE programs.

The following article covers the German bond market (THE perceived bastion of Eurozone stability). If Germany is having trouble raising funds then what does that bode for less stable countries such as the Mediterranean belt of Greece, Italy, and Spain? More bearishness is in the cards.

http://www.ft.com/cms/s/0/
16c7ceba-dcbe-11dd-a2a9-000077b07658.html?nclick_check=1

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