financial repression

Market participants, including economists and strategists are prone to confusing what they believe should be the case with what will be the case.

PIMCO’s Mohamed El-Erian and Bill Gross spoke exclusively with Bloomberg Television’s Tom Keene today from the company’s headquarters in Newport Beach, CA about Europe’s crisis, PIMCO’s investment strategy and Treasury yields. Video…

All US government obligations are substantially identical promises to repay a specific amount of the currency unit of account backed by nothing but taxing authority. So, Treasury bonds don’t ‘fund’ anything. If the Treasury were allowed to…

Just following up on my last post about the expectations theory of interest rates, I wanted to explain why yield curve inversion signals recession – and why it hasn't this go round in the US.

Economic policy has become more important than ever in the investment world. And the degree of policy uncertainty only increases as bailout and deficit fatigue battle it out with liquidity uber alles and financial repression as the policy…

So, our friends, a few questions. Which rates are the result of financial repression, capital flows, and/or stellar credit risk? And what is the best carry trade, assuming you can borrow close to the sovereign?

If real returns remain low, it will skew capital investment. When recession hits, debtors backing those losing investments will be caught out and forced to delever aggressively as resource misallocation becomes evident.

PIMCO, the world’ largest bond fund call this suppression of yields financial repression because it means savers and bond investors get negative real returns. However, John Hempton pointed out that in Japan, where this monetary policy is…

Investors shunning US debt ‘for whatever reason’ presupposes the outcome. I need to see the steps that get us from 2.25% 10-year rates to 4 or 5% without the Fed actively raising rates because the only way rates are going higher is because…

A stalemate could mean selective default. However, my sense is that the bonds themselves will be paid first. Other government expenditures will not get paid and that means a hardship for those who expect the money, whether companies doing…