Saturday, February 24, 2018

#DebtCrisis Gaining Momentum In Periphery Economies

The trend of rising interest rates is cyclical. The Fed, politicians, or bond experts can't stop it, because like us they're just spectators. The trend, in general, will be orderly most of the time, but there will be bouts of volatility and panic as a world addicted to debt is forced to adjust (chart 1-3). It's always been this way, so don't listen to "modern society is screwed up" interpretation; it's no more so that any other time in history. If we actual taught history, not some perverted version that preps for AP exams or the ACT test (prep exams), the linkage would crystal clear for younger generations. Written history, yes books still exist, suggests history is repeating all over again as Yogi would say. People pushing this time is different are either dangerously under educated or have agendas. It's human behavior, or sorry to say for men, at least a male-centric human behavior. Perhaps a society run by women, or balance by proper cross-section of society, yield different outcomes, but that's difficult debate to have based on historical facts. Men have been in charge for thousands of years with far too many dumb-ass alpha males crumbling dynasties and empires. Today's reshaping of politics is an indirect recognition of the representation problem. Humans just want to live their lives and make their own choices under a backdrop of peace and tranquility.

Chart 1


Chart 3

Headline: Italian bonds set for worst week of year as election looms

Italy's 10-year government bond yield was poised on Friday for its biggest weekly rise of the year so far, reflecting growing unease about a national election, just around the corner, that is expected to result in a hung parliament.

Italian bond markets have proved resilient in the run-up to the March 4 election thanks to a stronger euro zone economy, a ratings upgrade, a fall in risks of a euro-zone break-up and a toning down of anti-euro rhetoric from populist parties.



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