Inevitable meltdown

Yes, government bond yields around the world are plummeting to all-time lows.  They’re falling through the floor as investors realise the global economy is about as close to the drain as it’s been even through the “Global Financial Crisis”.

What do you mean “what about Greece and Spain”? Government bond yields are plummeting everywhere except where countries are part of a horribly flawed, disintegrating monetary union that isn’t in sync with the ideal currency union requirements.

Spain’s unemployment is higher than South Africa’s and the banking sector is teetering on the brink.  Greece desperately needs to go through the economy destroying exit from the Euro – the fallout from which will make it seem like leaving was the wrong choice when it fact it is the right choice.

European banks are enduring a jog on the bank – the relentless pressure of which will eventually push Greek then Spanish banks into a bottomless hole and take several European banks down with them.

It’s all falling apart and the world will not be the same after 2012. Textbook makers will make a killing out of updating their editions to reflect how much is different arising out of the 2012 disaster that was always going to happen.

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.