Plender: Why markets need to heed the lessons from the 1970s

Extremely low real bond yields suggest a monetary system that has lost credibility

 It is, by now, a familiar statistic, but one that retains its ability to shock: more than $13tn of government bonds are trading at negative yields. 

 But while this may strike many as unnatural, it is not unprecedented. In the Great Inflation of the 1970s real interest rates were extremely low or negative across much of the developed world.

 The music plays on for now.

 John Plender FT 24 July 2019

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