Suggestions of a reduction to the US Fed's quantitative easing programme has
pushed five-year yields to 1.53% today, from 0.65% in May. By comparison the
yield on a five-year euro mid-swaps has gone to 1.19% from 0.61%. Some Asian
bond issuers are now suggesting more euro-denominated bonds could be issued as a
result. One banker told Reuters: “There is no talk of tapering in Europe, so
interest rate volatility should be smaller than in the [US] Treasury market.”
Cross currency basis swaps from euros to dollars has also improved, meaning that
funding in euros is becoming cheaper for the many Asian issuers that routinely
swap back to dollars. China and Japan have emerged as the leaders of an exodus
from US Treasuries in June following the first signals from the US central bank
that it could end its stimulus packages, new data shows. The two nations
accounted for nearly all the record $40.8bn of net foreign selling. The sales
were part of a $66.9bn of net sales by foreigners of long-term US securities in
June – the fifth straight month of outflows. China, the largest foreign creditor
reduced its holdings to $1.276tn and Japan reduced its holdings for the third
month in a row to $1.08tn.....no doubt the Bank for International Settlements in
Basel are behind this story. The central bankers bank has been forcing banks to
increase their capital reserves for several years. This action has largely
assisted the global recession. Banks unable to lend. The Basel 1,2 and 3 accords
are now fully in action, the latest one coming into action earlier this year.
The BIS operated outside government control. Meeting in Switzerland no Swiss
officials are allowed to attend their meeting's. They are accountable to no one
and control the global economy. The fed is just a private consortium of banking
families pulling the chain of the US. Expect more bank mergers as they struggle
to meet the higher and higher capital reserve targets set by the BIS.
Stock market jitters = lots of opportunities for traders to sell something,
buy it back, sell it again a bit later, buy it back again, sell something they
don't even own, place a bet on the volatility all this buying and selling
causes, fire up the computers to buy and sell at the speed of light, and pocket
millions in commissions for totally socially useless activity.... Commissions
that come from our pension funds.
Happy days in the "City" - trebles all round.
Happy days in the "City" - trebles all round.
2 comments:
The whole economy of the US is one giant Ponzi scheme, the markets are at least , at this point, 60% over value, when you understand that QE is just pulling paper out of thin air, then you realise that this adds nothing to Real Asset, and there is one terrible day of reckoning about to dawn in this nation, this will make the so called crash of 2008 look like a picnic in the park, May God have mercy on us.
QE has to end sooner or later, and it will end badly. The Central Bankers, the high priests of the banking industry, will blame the politicos for not making enough structural changes in the economy to prevent the coming disaster.
Ironically, the most crucial structural change that is required is an overhaul of Central Banking, the Fed/Bank of England/ECB, and the debt production system of the banking industry.
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