Commentary on Political Economy

Saturday 10 September 2011

Further Comment on Martin Wolf

This reply by Stephen King of HSBC to Martin Wolf says pretty much what we said earlier in the week (see below): namely, that low bond yields certaibly do not mean that "markets are telling governments to borrow and spend". Rather, "markets" are just in a panic at the crisis of profitability! Which is not to say, of course, that governments should not "borrow and spend" - that is precisely what they must and will do! But Wolf is "misreading" the situation all the same. Here is the King article:

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