Do you know what total and complete “Quantitative Failure” looks like? It looks like what I’m seeing on my screen.
Bond prices are exploding higher (up 2 and a half points in price), while gold and silver are also flying (gold up $17+ an ounce), because investors are looking for safe yield in a world that’s sinking ever deeper into a NIRP/ZIRP quagmire.
The announcement yesterday by the Bank of England shows that we’re going to get even MORE of the same medicine that doesn’t work, too, so the logical response is to dog-pile into government bonds.
U.S. bonds may have measly yields … but they look downright awesome compared with the alternatives in Europe, Japan, and elsewhere. Even a handful of U.K. bonds traded down into negative yield territory yesterday.
It is going to take one of two things to end this stampede: A) A reversal of policy on the part of central banks or B) A significant acceleration in the economy.
I’m not seeing evidence of either right now, even as I know that the further this move extends, the greater the chance for an epic crack up in the end.