Similarly, the integration of emerging-market countries into the global economy has brought with it a flood of labor. According to standard trade theory, a global labor glut ought to imply an increased rate of return on capital, which again pushes interest rates up, not down.

Surely, any explanation must include the global constriction of credit, especially for small and medium-size businesses. Tighter regulation of lending standards has shut out an important source of global investment demand, putting downward pressure on interest rates.

My best guess is that when global uncertainty fades and global growth picks up, global interest rates will start to rise, too. But predicting the timing of this transition is difficult. The puzzle of the global savings glut may live on for several years to come.

Eoin Treacy's view It stands to reason that when growth returns to a self sustaining footing, that the need for extraordinary central bank intervention will decline. Central banks can then be expected to introduce a more appropriate short-term interest rate. However, as long as economic uncertainties prevail, bonds will remain a haven in times of stress, such as currently.