Business

Excerpted from Doug Noland's Credit Bubble Bulletin,

While everyone else is considering the implications of a -25 bps rate it is time for the astute to look down the road.  New forms of bonds with larger and larger negative coupons will emerge.  Governmental entities that are quick to adopt this new type of bond will see their deficits evaporate.  Which large investment house will be the first to offer a High Extortion Bond fund?  Diversifying was important with High Yield Bonds and there is no doubt that financial advisors would urge using a High Extortion Bond fund in order to control risk.  If a High Extortion Bond goes belly up your check

Now that Japan has let the negative rates genie out of the bottle, or as DB put it, 'opened the Pandora's Box' and in the process unleashed the latest global "silent bank run" and capital flight, prepare to hear a whole lot more about NIRP in the coming weeks because as Citi's Steven Englander put it, "Why are Negative Rates like Potato Chips? No one can have just one."

This is what else Englander said:

Submitted by Alexander Grover in Oslo, Norway

A Norwegian Gold Allocation Would Counter Sovereign Incompetence Risk

The Federal Reserve seems to have been caught off-guard by the recent turmoil on the markets. As the Chinese economic growth seems to be slowing down, all of the Western central banks need to re-think their plans, and the Federal Reserve will have to kneel in the dust.