The year of the moneylender

COMMENT

This is the time of year to look back at where we have been, in order to understand where we are going in 2014.

For a bond investor, the last 11 months have been a fascinating time in the markets. This has been an environment dominated by central banks. Looking first to the East, in Japan we have had the three arrows of Abenomics to stimulate inflation and spark economic activity, consisting of huge stimulus, aggressive monetary easing, and structural reforms.  To put the scale of such a programme in context, Japan has embarked on $75bn of QE monthly relative to the US, which is still buying $85bn worth of assets per month. Japan’s economy is just one third the size of the US economy, which giv...