(Reuters) - The so-called bond market vigilantes who in the past drove up U.S. bond yields and forced the government into more conservative budget policies are holding fire this time around. For now these influential - and at times feared -- investors seem to have concluded the U.S. economy is still too weak and deflation too much of a danger to tackle the budget deficit right away.Prominent economist Ed Yardeni coined the term "bond vigilantes" in 1984 to describe why major investors were demanding higher yields to compensate for perceived risks of rising inflation as a result of large deficits.But in recent interviews, some major bond fund managers say huge deficits are less of a worry in the short term than maintaining spending to keep the world's largest economy from falling back into recession.
(Reuters) - The so-called bond market vigilantes who in the past drove up U.S. bond yields and forced the government into more conservative budget policies are holding fire this time around.
For now these influential - and at times feared -- investors seem to have concluded the U.S. economy is still too weak and deflation too much of a danger to tackle the budget deficit right away.
Prominent economist Ed Yardeni coined the term "bond vigilantes" in 1984 to describe why major investors were demanding higher yields to compensate for perceived risks of rising inflation as a result of large deficits.
But in recent interviews, some major bond fund managers say huge deficits are less of a worry in the short term than maintaining spending to keep the world's largest economy from falling back into recession.
Here all we get are the result of subtle clues to enlightened behavior, that this group are moving in harmony with their brethren in the oil cartels who hold off their gouging when the temperament of the populace and the tea leaves are not aligned.
But wait until those signs of fiscal instability go away and they'll be right their to make sure stability is knocked out like the nuisance that it is. And not one Bond Vigilante will get out of line in either case, because they are the perfect parasite. Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
