If there was ever a single chart that could plunge a dagger into the heart of Keynesian central banking, it would be the one below. It demonstrates dramatically and unequivocally that the essence of this misbegotten enterprise is the systematic and massive falsification of financial assets prices—in this case, the world’s entire bond market.
As the Financial Times noted in the piece carrying the chart,
The hunt for yield is getting harder than ever for fixed-income investors. Roughly 86 per cent of the $60tn global bond market tracked by ICE Data Services traded with yields no higher than 2 per cent — a record proportion — with more than 60 per cent of the market yielding less than 1 per cent as of June 30.
Just 3 per cent of the investable bond world today yields more than 5 per cent — a share that is close to an all-time low, and represents a precipitous drop from levels seen roughly two decades ago.
By contrast, in the late 1990s, nearly 75% of bonds traded with yields above 5.0%, while sub-2 per cent yields comprised well under 10 per cent of the market.