Courtesy of Mish.
In regards to ECB QE bond purchases, inquiring minds may be asking: What hath ECB president Mario Draghi wrought?
I can explain in one picture.
The answer in words: The world’s biggest junk bond bubble.
I prefer gold.
On August 4, I commented on the Bubblicious Debate: Greenspan Says “Bond Bubble About to Break”, No Stock Market Bubble
There’s a bond bubble for sure, but it’s in corporate bonds, not treasuries.
This also isn’t the first time Greenspan has expressed concern about a bond bubble. Two years ago, when the 10-year Treasury yield was 2.44% and the CPI was 0.2%, he told Bloomberg TV that “we have a pending bond market bubble.” In a Bloomberg TV interview July 2016, he expressed concerns about stagflation and said “we’re seeing the very early signs of inflation beginning to tick up.” He also said with the 10-year Treasury yield pushed down to 1.50% by Brexit concerns, that he was “nervous” bond prices were too high.
“No Irrational Exuberance in Stocks”
“There is no irrational exuberance that I can see. In fact, it is just the opposite at this stage.”
