The global yield curve reveals why the 2008 recession was so bad, why the 2009 recovery was so pronounced and the outlook for 2012 and beyond. Aggregating individual country yield curves reveals a more complete picture of the true state of the global economy than looking at individual yield curves alone.
We sometimes miss the bigger picture, when we focus solely on the U.S. economy. This certainly seemed like the case in 2011, when precious metals corrected sharply in the second half of the year, despite a new U.S. easing effort in the form of ‘operation twist’. In particular, we can take our eye off the Chinese economy, which I shall examine below by looking at the Chinese yield curve.