It is often said that history never repeats itself, but on many occasions it rhymes. Where is the financial market today relative to years past, and is there anything that investors can learn? It is safe to say that there are no comparisons when it comes to current Western World central bank policy, except possibly the 1940s. Currently the U.S., Japan and the EU are seemingly on a mission to corner the market in their own sovereign nation bonds. The EU and Japan have even crossed over into corporate bond buying. The purpose of this exercise is political, masked in the mathematical jargon of economics.
But regardless of your politics, the fact is that by withdrawing a large supply of seemingly safe assets from the financial system, the central banks have pushed riskier asset values up and interest rates down. The end result, at least in the U.S., has been…