By Eric Peters, CIO of One River Asset Management
Debt Trap
“Are bond vigilantes back?” asked my favorite strategist, the two of us looking out over the horizon. “Surging real yields in Japan and the US wave a red flag. There’s simply too much debt,” he continued. When a government issues bonds, it stakes a claim on future national income. “No country borrowing in its own currency will default - but it might repay in devalued money. Gold has been flashing warning signs for nearly three years, and now bond-market enforcers are sounding the alarm by pushing real yields higher.”
