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Financial Times/Tommy Stubbington and Colby Smith/8-30-2020
“Government bond prices around the world dropped after Jay Powell confirmed last week that the Federal Reserve was prepared to tolerate higher inflation as it steers the economy through the aftermath of the coronavirus pandemic. But many investors say that talking about inflation is one thing, and actually generating swifter price rises is another entirely. Unless the Fed can avoid a path trodden by the Bank of Japan and the European Central Bank – where vast monetary stimulus has failed to nudge inflation back up to target levels – then a lasting reversal of the four-decade rally in fixed income is unlikely, they say.”
USAGOLD note: Henry Kissinger stated early on (reposted here yesterday afternoon, please scroll) that “the world will never be the same after the coronavirus”, and that rightly or wrongly “many countries’ institutions will be perceived as having failed.” To our great misfortune, his views gain more credibility as each day passes …