It’s in many ways a lamentable reality, but real it is that when investors are panicked they migrate into Treasuries. They do so not because government bonds are safe, but because government because bonds backed by the world’s most productive people are the picture of safe.
So, while describing Treasuries as a flight to safety is shooting fish in a crowded barrel, there’s an outre quality to it at the moment. In his last few columns, the Wall Street Journal’s Joseph Sternberg has made a variation of the same point about “unprecedented low interest rates and quantitative easing” having “distended global finance.” With seemingly all alleged problems in finance, including bank failure, Sternberg has fingered the Fed as the cause. Except that it’s hard to tie the central bank to the present, or past. Silicon Valley Bank (SVB) instructs here.
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