Fascinating article, Raul. I would just say that growth that is slow, ie., the new normal, is pretty much all we have left. The Fed cannot allow greater growth, because it cannot raise interest rates and destroy the value of sovereign bonds. As for the Eurozone, the TLTRO program, if expanded, could help the real economy. I am not a fan of the #Eurozone, but #Draghi may be a little smarter than the rest of the worlds' central bankers. Only time will tell.

Without wage inflation there is not much #inflation, Moon, only a tax on workers. Asset inflation is just a #tax on people who work and who are on fixed incomes. It doesn't impact massive demand for #bonds as collateral and bank capital.

But who is going to take rates rising seriously? #BenjaminCole said this: “But the Fed and right wing’s fixation with inflation appears to spill over into something that sociopathologists need to examine.”

My response, my opinion was, he has it right in a sarcastic sense. It is all about throwing tantrums, trying to push yield up. It is a game being played by the elite. Again, JMO.

Moon, I wrote that I think Greenspan is engaged in a process of tantrum where he tries to scare people out of holding sovereign bonds. Even though there is a rise in global debt, it is gold for the bankers and counterparties and there is a shortage of collateral. I wrote this about Greenspan and then read my newest article and you will be surprised what uses they are finding for sovereign bonds now that MBSs and other asset based debt can not be trusted so much: www.talkmarkets.com/.../greenspan-on-yields-slow-growth-and-hyperinflation

It is hard to have a bond bubble when demand continually exceeds supply. JMO.

"Insurance firms are victims of global warming and central bank zero interest rate policies." Just another reason to stop this zero rate nonsense. Interesting article all the way through.

I have a real hard time with furniture filled with formaldehyde coming to our shores, or dog food that can't be trusted, or steaks that have been shipped 11 thousand miles or LIAR loans being imported to the US and many other nations, from the UK where they were called self certified loans. Other than that, there are some benefits to globalization. But maintaining national sovereignty is now even more important for all nations. Regime change is a form of globalization that I also detest. It destroys the sovereignty of the nations and that bodes ill for the world, IMO. Not that we want crazy sovereigns, but rather cooperative sovereign nations.

Having said that, fossil fuels are ESSENTIAL. Without them, the GDP of the world will crumble, IMO. Making whole nations irrelevant is a dangerous FOLLY. It is futuristic thinking with a little potential eugenics thrown in. I caution against it because the desire to make nations like Russia irrelevant will be pushed by policy makers who envision a one world empire. That will likely end very badly.

GDP in Q2 makes it difficult to raise rates as the Fed contracts the money supply. The Fed, on the other hand, has a paranoia about inflation so it keeps talking rate hikes. The Fed will only be able to produce higher rates by expanding, not contracting, the money supply. And expanding it for mainstreet is the only way to allow higher rates. Of course, the Fed seems more content in the massive bond demand that now exists, than in worrying about mainstreet and money supply expansion. www.tradingeconomics.com/.../money-supply-m0

I would rather give cash to Tehran than put up with a society where money is banned. Even the Riksbank is against the banning of cash completely. Regular people will find substitutes. Or some may be forced to steal if kicked off the digital matrix. Crime could skyrocket.

Great article, except interest rates do not seem to be a function of growth over time. The relentless decline in yields has occurred in boom times in the 1990's and during the housing boom in the early 2000's. The 10 year bond has a life of its own, being hoarded. Hoarding skews the data, and more and more, usage as clearinghouse collateral and as tier 1 capital pushes yields down all along the curve.

Interest rate levels may be a function of inflation, which means the Fed cannot allow inflation. The Fed cannot permit inflation at all, because the hoarding of bonds as money, as gold, has made it impossible for it to do a Volcker or else the "gold" will lose its value. The very, very elite have determined, IMO, that this just cannot be permitted. Europe is a prime example, even dropping into negative to preserve the value of the sovereign bonds and notes.

I support Brexit, but not Trump. I was elated to learn that Nigel Farage has reservations about Donald Trump. With regard to Brexit, I don't think the UK was ready to go all in with the Euro. That was going to be required down the line. The Eurozone is likely just not for the Brits.

The Eurozone is not one nation, but rather is one currency with many sovereign bonds. That is a wild experiment to be sure. Hard to know if the Eurozone will go toward more negative rates or if it will increase the TLTRO program or implement other forms of helicopter money which could possibly push yields above zero.