Is the world's 3rd largest bond market imploding?
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Why you need to invest, in one chart...
Source: Charlie Bilello
The Federal Reserve has now lost a combined $192 Billion over the last 2 years
Source: Barchart, Wolfstreet.com
‼️ Let's be realistic.
Trump 2.0 and the next administrations are never going to become fiscally responsible by cutting spending at the risk of sending the economy into a recession. 🎯 They have no other choice than devaluing the real value of your bonds. Consequence is loss of purchasing power / money debasement for those stuck in cash and bonds. What are the options available to investors / savers? 1) Spend their money now 2) Invest into high quality stocks because they’re the ones receiving all this excess spending 3) Accumulate store of values
How losses compound:
Source: Steve Burns @SJosephBurns
Japan’s 20-Year bond auction gets weakest demand since 2012 – Bloomberg
A slump in Japanese bonds worsened Tuesday after the weakest demand at a government debt auction in more than a decade highlighted worries over the central bank’s retreat from the market. The rout drove up the 20-year yield by about 15 basis points to the highest since 2000, while the yield on 30-year bonds climbed to the most since that maturity was first sold in 1999. Yields on the 40-year tenor rose to a record high in a sign of nervousness ahead of a sale of that debt next week. The surge in yields underscores structural challenges particular to Japan’s debt market, along with the concerns of bond investors globally about the risks posed by rising government spending. Key Japanese buyers like life insurers aren’t stepping in to fill the gap as the central bank scales back its purchases of the nation’s bonds. Meanwhile, the Prime Minister’s comparison of his own nation’s fiscal position to that of Greece this week sharpened the focus on Japan’s huge debt burden. The result is that Japan’s bond curve is the steepest among major economies, even as yields globally are being driven higher, including for US Treasuries.
In Germany, Producer price deflation is picking up speed.
Producer Price Index (PPI) dropped by 0.9% YoY, driven mainly by a strong Euro and possibly early impact of US tariffs. PPI is an important leading indicator for consumer inflation, so this drop could signal further cooling in prices. Source: Bloomberg, HolgerZ
Germany drops its decade-old anti-nuclear stance.
In a statement to the Financial Times, German and French officials confirm Germany will no longer oppose nuclear in EU energy policy. A historic shift!
