from Arabian Money:
It’s the economy stupid! The US economic recovery is so weak and the global economic backdrop could hardly be worse. The current flirtation with higher interest rates will end in tears very soon.
Who bought the $2 trillion in AAA bonds issued around the world over the past year? Why the central banks bought them all to keep interest rates down. If they stop doing that the bond markets will crash and mayhem will rip through global financial markets.
Solid economic data?! Besides Ben Bernanke himself said any winding down in bond buying will depend on solid economic data. For all the talk of a US housing recovery, house starts are still 60 per cent down on pre-crisis levels. That’s a depression not a recession in housing.
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