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Bond worries and gold by Alasdair Macleod

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    Gold’n’Roll
    Keymaster

    A new economic insight by Alasdair Macleod from Goldmoney:

    Bond worries and gold

    I think this is the key point:

    “At some stage, and it could only be a matter of weeks or even days, the global outlook will cause all GSIB banks to become considerably more cautious, withdrawing lending facilities from smaller banks, financial speculators (hedge funds), and businesses alike. Lending to the last category ceases in two ways. In capital markets banks begin to cut their high levels of exposure to sub-investment grade bonds and syndications, and they withdraw working capital facilities for medium and small businesses. The crisis phase of the credit cycle is then irreversible.”

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