One of the reasons to blog these days is that we truly live in historic times. Political upheaval seems to occur weekly if not daily in some part of the world. Technology is advancing at a rate beyond our ability to comprehend. Social and cultural shocks are commonplace. I contend that all of this ultimately comes down to a scarcity of resources on the planet in which we live and how to allocate those resources as they dwindle while populations continue to grow. That is the subject of another post, or series of posts, so I digress.
The subject of this post is the extreme monetary measures that are being utilized in an attempt to address our problems, and why I think it will all end badly. You can see this in the amount of negative yielding sovereign debt that currently exists. As Zero Hedge mentions in the below link with reference to both a B of A research report and one of my favorite economists, Albert Edwards of SocGen, the average yield of all sovereign debt outside the US has dropped below zero for the first time ever
On top of this, the US share of global investment grade yields has climbed to 95%. Make no mistake about it folks, this is insane. Negative interest rates are a tax and a monetary black hole. One would also have to revisit the normal theory as to why the yield curve is currently flat or inverted recently. Is it that investors do not expect growth in the long term, or is it they have nowhere else to invest for yield aside from US sovereign paper?
Going back in history, printing money has always ended badly. War, food and supply shortages, governmental and societal collapse are things that come to mind. This time it is happening on a global scale.