New boiling in the bond market threatens severe economic crisis

Views 28 Date 09/19/2016 - 18:03

Economy News / Continue ...

The bond market is witnessing a significant increase in versions not seen since 2007, the year before the explosion of the global financial crisis in 2008/2009, which is still the world economy is suffering from the consequences yet, at the time increased the amount of debt, down at zero percent or by negative.
According to the latest census data from Delog company, it was traded bonds (for companies and countries) since the beginning of the year until now valued at 4.88 trillion dollars.

The value of bonds sold in the same period in 2007 at 4.91 trillion dollars.

With the turmoil in other markets, and uncertainty prevails over the future of the global economy, investors and investment funds seeking to take advantage of low interest rates to increase their portfolios of bonds.

The companies and governments to issue bonds benefiting from the low cost of borrowing in general.

Experts and financial analysts believe that the central banks, monetary policy is generally in the major countries, it helps to boil and bubble inflated debt in the bond market policies to make it easier to cut the cash rate and pumping stimulus money in the markets.

Many fear that the world almost on the verge of loans are similar to the previous crisis, with the complications is the weakness of general global economic growth and the fragility of the major economies that have not yet fully recovered from the previous crisis.

And increased debt sales volume this year by 9 percent from 2006, while debt sales volume reached a record high of $ 6.6 trillion (not including debt securities of sovereign states).

Experts believe that the increase in corporate debt by issuing new bonds increases the risk Mdionadtha burden at a time when it is difficult to expect generally improved sales because of weak economic growth.

The big companies began selling bonds at a yield of zero or even negative return, with an estimated volume of different statistics bond yield zero or negative rate in the global bond market is now estimated at $ 12.6 trillion.

And experiencing long-term corporate bonds, a significant decline in revenue, it reached 7 percent for bonds Microsoft for 40 years, and 6 percent for Apple's bonds due in 2046.

It is noteworthy that a number of economists warn of a bubble the global bond market for some time, and is considered by some to burst this bubble may be the spark of a new global economic crisis, the global economy may witness a deep recession could be up to the recession.

Content link