Once again, the essence of the European financial crisis, nor in Italy in Spain in Greece.
Incident of most happened last week.
It is upset bid of German government bonds.
Why is this essential problem.
This is because there is a possibility that can be regarded as incidents stage of the crisis has progressed one step, the heart of the crisis has come to clear it.
German government bonds, along with the deepening of the European crisis, so far (reduced yield), which has been price increases.
It begins to Greek sovereign debt, Portugal, Spain, Italy government bonds, until the French government bonds Shimaini, in which is sold by the child, risk aversion, as a transfer destination of the funds, the German government bonds of safe assets is because has been selected.
What problem German government bonds to fall.
It’s that there is a possibility that changes in investment behavior from the investment behavior of risk aversion, called flight to quality, balance sheet adjustment, of reducing the total amount of investment anyway.
What of this problem?.
Because there is a possibility that the financial market expansion trend long-term demise finally.
By risk aversion, I transfer funds to safe assets more.This is a normal thing, to where this flow is either directed, investors have been chasing the last few years it.Emerging risk willingness Achieving greater, if it becomes avoidance, say that the euro area and, to the United States debt is falling into crisis, relatively Germany and safety overwhelmingly in the euro, funds to German government bonds shifted.
Just risk avoidance behavior, this is a movement of in the cycle of stagnation and investment boom.It is happening now, it’s movement to reduce balance sheet adjustment by capital damage to financial institutions, the risk assets, of dropping the leverage.It is so-called closing out, but here’s the point.
It will not Ji this hand, but it or not the cycle of short-term, or trend of the mid-term, or structural changes in the long-term, and that, or hit in any is important, this is a point in helping to predict the future of the financial markets in the future.
It was entered in the reduced cycle in the short term there is no doubt, because to accelerate in Europe especially flow to lower the leverage, and the world, even in the medium-term, in terms of 5 to 10 years, this trend will continue for some time.Problem because was the essence of modern financial markets is what the continued expansion structure is whether the change in the 100-year period, and continued expansion of the scale of the financial markets of modern capitalism since the founding, the focus this is whether or not the end it becomes a.
Thing that financial markets do not go away of course.However, there is a possibility that modern financial markets disappeared, capitalism degenerates, it’s the focus of the now.
Speaking phenomenologically, when it is propagated to Japanese government bonds from German government bonds, if because he considered this, Japan Germany also, there is risk, long-term change does not occur.On the other hand, it is assumed that a move referred to in the reduction of the investment total worldwide, to stop the funding, this is, and reduce the investment anyway, the world financial markets will move to a new stage.
To distinguish it, but if you, including Treasuries, government bonds all fell at the same time.It is the beginning of the end, it would be the beginning of the beginning.