Post
Topic
Board Economics
Re: RBS: Sell everything
by
by.Szun
on 12/05/2016, 01:53:49 UTC
Buying "high quality" Cheesy bonds is the worst advice ever. While I agree that stock markets could drop soon, because valuations are historically high and the economic situation is not really improving, investing the money into bonds is outright lunacy. Bonds are the biggest bubble of all, especially government bonds.

Western governments are more indebted than ever before. Yet their bonds pay no significant or even negative interest. One of the reason: Central banks are buying the debt with freshly printed money. Bonds may be rated "AAA", but in fact most of them are junk. No one in his right mind would invest in bonds - well... except bankers... Cheesy

The most reasonable alternative to stocks are precious metals and Bitcoin.

ya.ya.yo!
You are correct. Debt to GDP ratios are skyrocketing and your "high quality" bonds are last ditch attempts to stabilize economies. The bond market is over-saturated and is propped up on extremely low-yield bonds that traders are now scrambling to sell. These low yields are the only way that the governments can maintain the illusion of a robust economy. Now is a massive crash coming? Most likely not. But a massive slowdown and global recession is almost guaranteed to occur this year. Look to China to trigger this downward spiral, followed by Japan.
Some good links:
http://davidstockmanscontracorner.com/another-step-off-the-deep-end-boj-to-offer-japanese-banks-negative-interest-rates-to-fund-commercial-loans/
http://davidstockmanscontracorner.com/here-it-comes-ugly-end-game-for-japan-on-debt-spiral/
http://davidstockmanscontracorner.com/good-job-kuroda-san-japanese-government-bond-market-is-dying/
http://davidstockmanscontracorner.com/the-1-trillion-bubble-at-the-bottom-of-the-bond-market/

Disclaimer: i have no affiliation with Stockman, or his website. I just think that he collects news very well and injects his own opinions/research/analysis very well.