Hogwash, Humbug And Diabolical Malarkey

The chart below explains the evils of modern central banking about as well as any. It shows between the pre-crisis peak in 2007 and the present that the amount of worldwide government bonds outstanding grew from $20 trillion to $50 trillion (black line). That represented a 6.8% per annum growth rate or more than double the 2.9% per annum expansion of global GDP.

During the same period interest rates plunged, thereby contradicting historical economic rules and common sense, too. On a global weighted average basis, in fact, the yield on government debt dropped by nearly three-fourths— from nearly 4.0% to less than 1.0% at the present time. And among some of the major government issuers, the present yield is even lower at -0.29% on the German 10-year bund, 0.063% on the Japanese 10-year, 0.08% on the French 10-year, 0.47% on the Spanish 10-year and 0.89% on the UK 10-year, among others.

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