10 Largest/Most Advanced Economies (2011 - based on nominal GDP):
US - actively engaged in QE w/no end date. 2 year yield = 0.22%
DJIA, S&Ps, and RUT at all time highs.
FOMC buying $85 billion/month.
Japan - actively engaged in QE w/no end date. 2 year yield = 0.11%.
After months and months of talking, the Japanese announced that they will buy $190 billion USD equivalents of ETFs/REITS/JGBs. Nikkei up over 3% overnight and back to June 2008 levels. Congrats Shinzo.
Germany - Chastising QE types (but dependent upon weak Euro for export led growth). 2 year yield = (0.01%). That's correct, a NEGATIVE yield.....you pay Germany to give your money back in 2015.
France - pushing for more QE. 2 year yield = 0.12%
UK - actively engaged in QE. 2 year yield = 0.29%
Expected to leave their Asset Purchase program unchanged on Thursday.
Italy - pushing for more QE. 2 year yield = 1.25%
Canada - 2 year yield = 0.98%
Spain - pushing for more QE (27% unemployment with 50% youth unemployment). 2 year yield = 1.57%
South Korea - 2 year yield = 2.54%
Austria. 2 year yield = 0.132%
Australia - cut rates overnight. 2 year yield = 2.53%
Denmark 2 year yield = 0.147%
Israel 2 year yield = 1.16%
Netherlands 2 year yield = 0.06%
Singapore 2 year yield = .204%
Switzerland 2 year yield = (0.054). Yup, another negative yield.
Economics or the Dismal Science is about relationships and incentives. Central Bankers have incented chasing yield for years now.....and it's working. We also have a tendency to think in nominal terms (as opposed to purchasing power). Choices in life and in Economics/monetary policy have consequences and that's why I'll remain friendly to the Precious Metals.
To be clear, I'm not advocating being blindly long......to everything turn, turn, turn. Also, I wish the global QE would END because the longer it goes on the greater the ancillary perversions become, but I don't believe somebody (or something - Central Banks) that tell me one thing and do the opposite.
The negative yields in Germany/Switzerland and low yields across the rest of the "developed" world give new perspective to the conversation about return ON investment v. return OF investment.