We know why western government bond yields are so low. In part they reflect the response of investors to most western economies having gone spectacularly ex-growth courtesy of decades of overspending and the fiscal impact of the Global Financial Crisis. In part they reflect financial repression: that heavily indebted western governments are aggressively coercing investors to hold that debt. And in part they reflect the fact that western governments, through their economic agents, the central banks, are rigging the market in their own debt: governments issue debt, only to have their central banks buy it right back, thus creating liquidity for commercial banks that can put that money to more productive use - like artificially inflating their stock markets. Because market manipulation is normally illegal, the monetary authorities have coined a phrase to give their market rigging an air of technical sophistication - quantitative easing, or QE.

David Fuller's view These are interesting times, for sure. Therefore, I hope that subscribers also find some comfort in this fine quote which appears at the beginning of Tim Prices' letter:

"In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand."
- Benjamin Graham.