Mitsubishi Group: Stimulus Withdrawal Or Bond Strikes...

Online, August 6, 2010 (Newswire.com) - Asia-based investment house, "Mitsubishi Group", has told clients to expect the leaders of the most developed economies to err on the side of caution as far as withdrawal of the massive stimulus measures introduced to prop up their economies after the global financial crisis and subsequent recession.

"Mitsubishi Group", warned that nations like the United States, the UK, and several EU states were fast approaching the stage where the bond markets would begin to demand higher yields to buy their debt.

"Mitsubishi Group" believes that although default was unlikely, some countries could experience Greece-style difficulties in borrowing money at reasonable rates because the markets were becoming saturated with record levels of debt issuance. Leaders of these nations, however, are keen to ensure the sustainability of the recoveries in their economies and would likely continue stimulus measures rather than have their countries fall back into recession.

Consequently, the firm has advised clients to avoid investing in bond funds and have, instead, reiterated their recommendations to purchase precious metals including gold and silver as a hedge against the inevitable devaluation of paper-based (fiat) currencies.

"Mitsubishi Group" said that the likelihood of bond strikes, where investors refuse to buy sovereign debt unless higher yields are paid, would force some countries, most notably the UK, to restart their quantitative easing programs.