The sell-off in Japanese bonds is a warning to global economies. As yields – particularly at longer maturities – soar and demand collapses, Japan is becoming a case study in what happens when investors lose patience with huge deficits and debt. Japan’s government bond market is currently facing an existential crisis, marked by a sharp …
Tag: government bonds
Inflation is slowly and painfully killing the middle-income class
In a speech in July, Harvard University professor Gregory Mankiw laid out with brutal honesty what needs to happen to end the unsustainable accumulation of debt in the United States. The options are five: Logic dictates that some combination of these will be inevitable. These potential solutions are common throughout the developed world. Through a …
The mother of crises comes… from the USA – The graph of terror
The global economy is one step away from a serious crisis, which will start again in the United States but this time will concern the country’s excessive public debt, warns Trust Economics in a report. The American economy is facing a significant turning point, which does not just concern interest rates or debt, but the …
GDP growth is an illusion, governments are spending irresponsibly
The numbers may look positive, but behind the statistics, Western economies are already in recession, warns Trust Economics in its analysis, emphasizing that “growth” is nothing more than a fiscal illusion, based on a surge in government deficits and not on a real increase in economic activity in the private sector. Subtract government deficits from …
Tariffs and the $3 trillion held by Asian central banks that make them punishers in the US bond market
Great turmoil, great situation – to use a phrase from former Chinese President Mao Zedong to sum up the trade war declared by President Trump. The dollar extended its biggest plunge in three years on Friday, April 11, after China raised tariffs on U.S. goods to 125% from 84%, a step up in tensions that …
US will issue 100-year T-bonds with gold to become their lifeline
Donald Trump’s economic policy aims to reduce US trade deficits with third countries and relocate the production base to the United States. At the same time, he has to deal with a monstrous public debt that has exceeded 36 trillion dollars and interest payments have exceeded defense spending for the first time! A tool for …
Trump administration cuts borrowing costs in two ways: Musk’s DOGE in spending and cheaper energy
By sidelining the Federal Reserve in order to lower borrowing costs for Americans, the Donald Trump administration says it will reduce government spending and increase energy supplies. The payoff will be twofold: it will ease inflationary pressures and strengthen the economy’s fiscal position. While President Trump continues to urge the Fed to lower short-term interest …
The Global Debt Crisis is just around the corner
The bond market and dollar index have begun to sensitize to the potential implications of another Trump victory. The ten-year yield has increased by 55 bp. after the Federal Reserve cut interest rates in mid-September. Americans who have been waiting for rate cuts are once again battling with their mortgage rates starting with the digit …
USA: At 1 trillion interest on debt for the first time in history, explosive budget deficit
2024 was the year in which the huge US budget deficit was supposed to have gradually leveled off after two years of crisis. The US was supposed to end the spending spree. All this, on a theoretical level. As of August, the US deficit has exceeded that of 2023. What does the evidence say?
Slowly and steadily cracks are appearing in the Financial System
The FED raised interest rates above 5%, yet the US economy is not broken. The bond yield curve has been inverted since 2022 and has remained inverted ever since. The lags looked short, with the US economy only briefly causing concern in 2023 when there was a consensus among market participants that a recession would …