EcoPolitical

This is a market that trades between US$ 500-600 billion a day, one of the most liquid markets in the world (behind the forex market). This is why the breach of a long term support or resistance has that much more significance, because more traded the security the more credible are its turning points. As you can see from the below chart, the US benchmark 10 year yield has largely followed the discipline of its long term trend lines. The collective greed and fear of the markets is more completely reflected in the bond markets than in the equity markets, since large institutions like banks, insurance companies, central banks etc. (what are considered as sophisticated investors) trade in this market.  Even more so the US Bond market that is considered the safest yield bearing asset and often a refuge for investors fleeing uncertainty.  Primer: Bond yields are inversely related to the price of the bonds. When bond price rises, the yields fall, and vice versa. Bond pr...

This is a follow-up piece to my earlier note, Debt-plomacy  that highlighted how China has used its currency printing presses liberally, to accumulate a global footprint of strategic investments. As per data compiled by the American Enterprise Institute, and The Heritage Group, between 2005-2019, China is estimated to have invested over US$ 2 trillion in 150 countries globally, gaining political and social influence in return. For perspective, it is worth noting these investments were more than the addition in the total Indian GDP during the same period (US$ 0.8 trillion in 2005 to US$ 2.72 trillion in the last fiscal). This global thrust by the Chinese, is underpinned by its ability to print money without apparently pushing up the CPI. One wonders if this is a uniquely Asian phenomenon where lower interest rates  on savings actually spur people to increase savings, rather than consume (Gross Domestic Savings in China are 45% of its GDP). There are of course contributing i...