{"id":61055,"date":"2021-12-22T09:08:20","date_gmt":"2021-12-22T14:08:20","guid":{"rendered":"https:\/\/olduvai.ca\/?p=61055"},"modified":"2021-12-22T09:08:20","modified_gmt":"2021-12-22T14:08:20","slug":"potential-for-extreme-havoc-50-trillion-question-is-what-if-yields-spike-higher","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=61055","title":{"rendered":"&#8220;Potential For Extreme Havoc&#8221;: $50 Trillion Question Is What If Yields Spike Higher"},"content":{"rendered":"<header class=\"ArticleFull_header__11o5_\">\n<h3 class=\"ArticleFull_title__2cUI6\"><a href=\"https:\/\/www.zerohedge.com\/markets\/potential-extreme-havoc-50-trillion-question-what-if-yields-spike-higher\">&#8220;Potential For Extreme Havoc&#8221;: $50 Trillion Question Is What If Yields Spike Higher<\/a><\/h3>\n<\/header>\n<div class=\"NodeContent_mainContent__38L44\">\n<div class=\"NodeContent_body__2clki NodeBody_container__1M6aJ\">\n<p>The size of the global government bond market surged by $10 trillion in the space of two years to reach about $50 trillion. Those outstanding borrowings are at least one gorilla in the room as investors gear up for a year in which yields are expected to climb as central banks step back and economies extend their recovery.<\/p>\n<p><a href=\"https:\/\/www.zerohedge.com\/s3\/files\/inline-images\/funding%20gap.jpg?itok=eQPCaKMW\" data-image-external-href=\"\" data-image-href=\"\/s3\/files\/inline-images\/funding%20gap.jpg?itok=eQPCaKMW\" data-link-option=\"0\"><picture><img loading=\"lazy\" decoding=\"async\" class=\"inline-images image-style-inline-images\" src=\"https:\/\/assets.zerohedge.com\/s3fs-public\/styles\/inline_image_mobile\/public\/inline-images\/funding%20gap.jpg?itok=eQPCaKMW\" alt=\"\" width=\"500\" height=\"282\" data-entity-type=\"file\" data-entity-uuid=\"ad7add37-e99a-4efe-9e7a-359ac39c6102\" data-responsive-image-style=\"inline_images\" \/><\/picture><\/a><\/p>\n<div class=\"Advert_desktop__1J5vD Advert_tablet__3QEBr Advert_mobile__1rlLc Advert_placement__1I4yb Advert_align__N0_fw\">\n<aside id=\"in-content-video\" class=\"Advert_verticallySpaced__wnPy3\" data-google-query-id=\"CLqAu7bB9_QCFTQD0AQdtPkIiQ\">\n<div id=\"google_ads_iframe_\/21841313772,21778456762\/zerohedge\/in_content_video_0__container__\"><strong>The massive bond mountain is not getting much attention, despite the explosive pace at which it grew in size and given the potential it holds to cause extreme havoc. <\/strong>That could be because it is simply too large to seriously contemplate, but the rapid growth in debt is one of the many Covid-era phenomena spicing up the market outlook for the coming year<\/div>\n<\/aside>\n<\/div>\n<p>At the very least the weight of all that debt acts to enhance the role that \u201cprice-insensitive\u201d investors play in repressing yields.<\/p>\n<p>The savings glut is a big part of that pool. Across Asia and beyond there\u2019s a generation or two who grew wealthy from the postwar booms and are now more concerned about preserving capital than about adding to it.<\/p>\n<p>Their presence helps to explain the waves of buying that contributed to capping yields at about 1.7% for 10-year Treasuries this year, as does demand from pension funds and insurers &#8212; remember the U.S. defined-benefit funds who switched into bonds.<\/p>\n<p>Then there are the essentially forced investments from banks that have to hold sovereign securities to meet rules introduced after the collapse of Lehman Brothers.<\/p>\n<p>And we have the trillions of dollars that central banks hold, both via QE programs and in their foreign-exchange reserves.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Potential For Extreme Havoc&#8221;: $50 Trillion Question Is What If Yields Spike Higher The size of the global government bond market surged by $10 trillion in the space of two years to reach about $50 trillion. Those outstanding borrowings are at least one gorilla in the room as investors gear up for a year in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[31065,5185,3186,124,1849,32331,431,534,4318],"class_list":["post-61055","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bloomberg-markets-live","tag-bond-market","tag-bond-yields","tag-central-banks","tag-financial-markets","tag-garfield-reynolds","tag-interest-rates","tag-monetary-policy","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61055","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=61055"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61055\/revisions"}],"predecessor-version":[{"id":61056,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61055\/revisions\/61056"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=61055"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=61055"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=61055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}