The Search For Yield

The effect of quantitative easing on asset yields is clear. When central banks buy bonds and other private sector assets, they bid up the price and push the yield down. Last week, junk bonds in…

Lowering The Cash Rate Is No Panacea

Last week the Reserve Bank of Australia lowered its cash rate to a record low.The Australian dollar tumbled, and there are rumours that George Soros bet US$1 billion against the Aussie in expectation of that….

Low Interest Rates And Risk

The music is still playing despite global interest rates being very low. Quantitative easing is acting as an interest rate suppressant, bidding up the prices of bonds and therefore lowering yields. When you are earning…