How Gold Is Mined: The Rise And Repression Of The 'Bond Vigilantes'

Yardeni On Bond Yields And GDP - Business InsiderFeaturedTrendingRecent

Login Remember me I forgot username or password Login with Twitter Login with Facebook Login with LinkedIn Login with Google Register EventsBI IntelligenceTechFinancePoliticsStrategyLifeEntertainmentAll Tech Enterprise Science

The Social Media Advertising Ecosystem Explained

The iPhone's New Back Button Has The Former Design Director Of The New...

Why This Whole 'Secretly Rating Men On Facebook' Thing Won't Last

How To Become Invisible To The NSA's Domestic Spying Program

How McCormick Got Its Electricity Use Down To Net Zero

These US Cities Can't Hire Tech Workers Fast Enough

13 Enterprise Apps That Drive People Nuts Even Though They're Free

14 Tech Execs Who Could Probably Kick Your Butt In A Fight

Is This Creepy Looking Animal The Jersey Devil?

Updated Flood Maps Show How Vulnerable New York City Really Is

Montana Conservationist Accused Of Declaring War On Wolves

These Are The 2013 Atlantic Hurricane And Tropical Storm Names Finance Markets Your Money

The Trailer For Martin Scorsese's 'Wolf Of Wall Street' Looks Sick —...

Doug Kass Leaves Twitter, Blames 'Too Many Haters'

A Finance Worker From Connecticut Was Just Crowned Miss USA

George Soros' Older Brother Made An Engineering Breakthrough That...

The Worst Chart In The World

11 Tapirs That Are Worried About The Taper

35 Years Of Failed Economic Forecasts In One Chart

10 Things You Need To Know This Morning

The 10 Cheapest Cities In The World

Here's Where You Can Buy A House With A Pool For $100,000 Or Less

Dick's Sporting Goods 'Buy One Get One Free' Coupon Includes A Major Fail

A Good Dad Is Worth $23,344 Politics Military & Defense Law & Order

Former Romney Economic Adviser Writes New Paper In Defense Of The '1...

Canada Mayor Crisis Spreads: Montreal Mayor In Custody

Obama's Approval Rating Plummets, With A Stunning Drop Among Young People

CBS' Bob Schieffer Destroys Edward Snowden In 90 Seconds

Syrian Rebels Unleash Unprecedented 6-Ton Car Bomb, Killing 60

Microsoft Alienates Troops With The Always-Online Xbox One

Guantánamo Prisoners Singing Akon's 'Locked Up' While Being Force Fed...

Lawsuit Over CIA 'War Crimes' Probe Points To The Underbelly Of Secret Ops

LAWSUIT: Utah Cops Shot 21-Year-Old Woman 'Assassination Style'

How Flint, Michigan Became The Most Dangerous City In America

Why 3 Of America's Most Dangerous Cities Are In Wealthy Connecticut

This Man Is Either The World's Biggest Patent Troll Or A Champion Of... Strategy Careers Advertising Retail Small Business

12 Of The Shrewdest Business Maneuvers Of All Time

Cheesecake Factory's 174 General Managers Are Given New BMWs Every 3 Years

What 6 Executives Learned From Going On 'Undercover Boss'

Booth And Columbia MBA Students Get The Highest Summer Pay

What New Yorkers Earn For A Living

71% Of Millennials Want Their Co-Workers To Be A 'Second Family'

What's It Like Working For No Money?

INSTANT MBA: There Are Challenges Unique To Leadership Roles

Web Ad Business About To Suffer Stunning Defeat At Hands Of 'A Volunteer...

Siri Takes Another Beating From Microsoft In Latest Anti-iPad Commercial

'Million Moms' Are Upset About Kraft's Naked Salad Dressing Man

Brian O'Kelley Is Really Enjoying All The Speculation That Yahoo May...

Cheesecake Factory's 174 General Managers Are Given New BMWs Every 3 Years

This 4-Person Startup Is Trying To Change Online Shopping As We Know It

QUIZ: Who Do These Famous Frames Belong To?

What 6 Executives Learned From Going On 'Undercover Boss' Life Transportation

12 American Bars To Drink At Before You Die

QUIZ: Who Do These Famous Frames Belong To?

China's Plan To Build The World's Tallest Skyscraper In 90 Days Is...

6 Amazing Recreated Photos Of Kids And Their Dads

The First Test Flight Of The Brand New Airbus Jetliner Went Perfectly

Flight From Egypt To New York Diverted To Scotland After Threatening... Entertainment Sports

Miss Utah Falls Apart While Answering An Easy Question About Women...

The First Trailer For 'The Wolf Of Wall Street' Is A Giant Gatsby-Sized...

Britney Spears Releases New Squeaky-Clean Single 'Ooh La La'

'Man Of Steel' Flies Past The Competition With Record June Opening —...

Tony Parker Explained Why The Miami Heat Keep Giving Danny Green Wide...

Report: Allen Iverson Allegedly Kidnapped His Own Children And Is...

LeBron James Got Shut Down By A Chubby French Role Player Last Night

Phil Mickelson Can't Close Out At The Majors And It Is Killing His Legacy Sections A-ZAdvertisingCareersEnterpriseEntertainmentFinanceMarketsLaw & OrderLifeMilitary & DefensePoliticsRetailScienceSmall BusinessSportsStrategyTechTransportationYour MoneyYour NewsListsSilicon Alley 100Digital 100Silicon Valley 100Clusterstock 50The Most Important ChartsThe Life 50More »Sponsored Sections10 Things To Know In Small Business Best New Small Businesses in AtlantaComing Up NextThe Future of BusinessInspired to StriveMonday Scouting ReportSmall Business, Big IdeasVideo RevolutionToolsLatestHiveJob ListingsDocument CenterAccount PreferencesRegisterVideoMobileFull ArchivesAbout BIAboutJobs at BIMastheadContactAdvertiseContributers FAQLegal Fine PrintFollow BINewslettersAlertsRSSTwitterFacebookLinkedInGoogle+CompaniesAuthorsCategories From To You have successfully emailed the post. Markets More: Ed Yardeni Interest Rates GDP The Rise And Repression Of The 'Bond Vigilantes' Ed Yardeni, Dr. Ed's Blog Jun. 17, 2013, 9:41 AM 281 1 Tweet!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs");EmailShare on Tumblr

gdp rates Dr. Ed's Blog

$('.icon-tooltip').tooltip(); Ed Yardeni

Ed Yardeni is the President and Chief Investment Strategist of Yardeni Research

Recent PostsThe Stock Market's Current Valuation Is Just Right For A 'Rational...Friday's Jobs Report Was Actually 'Goldilocks On Steroids'CHART: See The Dow And Japan's Nikkei Cross Each Other

The Bond Yield & GDP (excerpt) S&P 500 Revenues & Earnings Review (excerpt) China (excerpt) $('.icon-tooltip').tooltip();In the past, before the era of financial repression imposed by central banks, the 10-year Treasury bond yield tended to trade around the y/y growth rate of nominal GDP. From the 1950s through the 1970s, the yield tended to trade below the GDP growth rate because bond investors failed to anticipate rising inflation.

They learned their lesson and bond yields generally exceeded GDP growth during the 1980s and early 1990s. That was the era of the "Bond Vigilantes," a term I coined in 1983. They contributed to breaking the back of inflation. As a result, by the late 1990s, they became less vigilant. While they’ve been repressed in the US by the Fed since late 2008, they were back in the saddle again during 2010 and 2011 in the peripheral countries of Europe. But then, ECB President Mario Draghi repressed them over there when he said on July 26, 2012 that he’ll do whatever it takes to defend the euro.

If the Fed stops repressing the Bond Vigilantes over here by phasing out QE, then the 10-year Treasury yield should rise to the growth rate of GDP, which was 3.4% y/y during Q1. That would probably be a big shock to the economy.

gdp yield Dr. Ed's Blog

Today's Morning Briefing: Ben’s Choices. (1) Door #1, #2, or #3. (2) Press conference pressure. (3) Will Bernanke discipline the dissenters or cave? (4) Good excuse to taper QE: Federal deficit is shrinking. (5) Hail Mary pass. (6) Old normal bond yields would be a shock for sure. (7) Big outflow from bond funds last week. (8) EM stocks and bonds are submerging. (9) QE chatter is depressing inflationary expectations and boosting TIPS yield. (10) Retail sales a plus for Q2’s GDP, while discrediting recession forecast. (11) Lowering S&P 500 Retailing to market weight. (More for subscribers.)

To embed this post, copy the code below and paste into your website or blog.600px wide (preview)400px wide (preview) 300px wide (preview) Alerts Newsletter URL Recommended For You

NYSE Trader Explains How Dow Theory Works NYSE Trader Explains How Dow Theory Works More: Ed Yardeni Interest Rates GDP Get Alerts for these topics »

Advertisement:Join The Discussion OR Login With Facebook Login With Twitter Login With Google Submit the comment for Insider Status Comments Apply To Be An "Insider" » Insiders0All Comments1

Loading The Rise And Repression Of The 'Bond Vigilantes' The Rise And Repression Of The 'Bond Vigilantes'

They're standing by to bring a big shock to the economy.

Get Markets Emails & AlertsLearn More »IndustryAccountingAirlines/AviationAlternative Dispute ResolutionAlternative MedicineAnimationApparel & FashionArchitecture & PlanningArts and CraftsAutomotiveAviation & AerospaceBankingBiotechnologyBroadcast MediaBuilding MaterialsBusiness Supplies and EquipmentCapital MarketsChemicalsCivic & Social OrganizationCivil EngineeringCommercial Real EstateComputer & Network SecurityComputer GamesComputer HardwareComputer NetworkingComputer SoftwareConstructionConsumer ElectronicsConsumer GoodsConsumer ServicesCosmeticsDairyDefense & SpaceDesignEducation ManagementE-LearningElectrical/Electronic ManufacturingEntertainmentEnvironmental ServicesEvents ServicesExecutive OfficeFacilities ServicesFarmingFinancial ServicesFine ArtFisheryFood & BeveragesFood ProductionFund-RaisingFurnitureGambling & CasinosGlass, Ceramics & ConcreteGovernment AdministrationGovernment RelationsGraphic DesignHealth, Wellness and FitnessHigher EducationHospital & Health CareHospitalityHuman ResourcesImport and ExportIndividual & Family ServicesIndustrial AutomationInformation ServicesInformation Technology and ServicesInsuranceInternational AffairsInternational Trade and DevelopmentInternetInvestment BankingInvestment ManagementJudiciaryLaw EnforcementLaw PracticeLegal ServicesLegislative OfficeLeisure, Travel & TourismLibrariesLogistics and Supply ChainLuxury Goods & JewelryMachineryManagement ConsultingMaritimeMarketing and AdvertisingMarket ResearchMechanical or Industrial EngineeringMedia ProductionMedical DevicesMedical PracticeMental Health CareMilitaryMining & MetalsMotion Pictures and FilmMuseums and InstitutionsMusicNanotechnologyNewspapersNonprofit Organization ManagementOil & EnergyOnline MediaOutsourcing/OffshoringPackage/Freight DeliveryPackaging and ContainersPaper & Forest ProductsPerforming ArtsPharmaceuticalsPhilanthropyPhotographyPlasticsPolitical OrganizationPrimary/Secondary EducationPrintingProfessional Training & CoachingProgram DevelopmentPublic PolicyPublic Relations and CommunicationsPublic SafetyPublishingRailroad ManufactureRanchingReal EstateRecreational Facilities and ServicesReligious InstitutionsRenewables & EnvironmentResearchRestaurantsRetailSecurity and InvestigationsSemiconductorsShipbuildingSporting GoodsSportsStaffing and RecruitingSupermarketsTelecommunicationsTextilesThink TanksTobaccoTranslation and LocalizationTransportation/Trucking/RailroadUtilitiesVenture Capital & Private EquityVeterinaryWarehousingWholesaleWine and SpiritsWirelessWriting and EditingBusiness Insider SelectMoney Game Select10 Things Before the Opening BellMoney Game Chart Of The DayMonday Scouting ReportMoreFeaturedBusiness Insider SelectTechnologySAI SelectMobile InsightsScience SelectAdvertising SelectAdvertising: The BriefSocial Media InsightsFinanceFinancial Advisor InsightsClusterstock SelectMoney Game SelectYour Money SelectSmart InvestorMonday Scouting ReportLifestyleThe Wire SelectThe Life SelectSports Page SelectGetting There SelectManagementRetail SelectBreaking NewsWar Room SelectEnterprise SelectCareers SelectInstant MBAMarketing MondaysPolitics and MilitaryPolitics SelectMilitary SelectLaw & Order SelectTop 10 Things & ListsLists Select10 Things In Tech You Need To Know10 Things Before the Opening BellClosing BellCharts of the DaySAI Chart Of The DayMoney Game Chart Of The DaySports Page Chart Of The DayAdvertisementYour Money NASDAQ Composite 3,460 +36.61 (+1.069%) S&P 500 1,645 +18.11 (+1.113%) NYSE Composite 9,365 +101.58 (+1.097%) LinkedIn Login Hot: LinkedIn In your network

The Social Media Advertising Ecosystem Explained