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About China’s Silly Bond Bubble
China has a bond bubble on its hands.
I'm not sure how interesting that is for everyday investors -- "casual" readers, so to speak -- but it's worth a mention, particularly given the extent to which it's a reflection of the country's economic woes and the PBoC's impossible bind.
10-year yields in China hit a record low on Monday, down around 2.15%.
As the figure shows, the rally escalated in 2024 as growth concerns mounted.
Bonds tend to be bid in a deflationary environment. And China's st
As Dr. H says, it is interesting that the PBOC is trying to simultaneously lower rates and prevent bond prices from rising. Perhaps this is China’s version of the Fed’s “Operation Twist” although in reverse. Or perhaps this is China’s desire to encourage borrowers but discourage traders, by creating different rates for each.
Apparently no-one at PBOC has given the “I canna change the laws of physics” speech to Xi, delete the Scottish accent.
I’m sure these articles are tedious to write, but they’re a delight to read for a certain sort of international economics weirdo. I can’t think of a single source outside of specialists covering (and explaining) this sort of material.