It is a question that I am repeatedly asked at seminars and conferences. After all, participants in the housing and equity markets set prices with a view to prices in the bond market, so contagion from one long term market to another seems like a real possibility.

America s Bond Market Blues

The US bond market agrees with me.

The stock market has dropped today.

Higher prices can mean higher incomes for them.

This is the old way of reform price increase .

In China, despite some signs of weakness the Shanghai market is down, for example price growth is still robust in much of the country.

How Scary Is the Bond Market?

No difference means no market.

Steinhoff is dominant in the neighbouring South African market and might abuse that position dominance in the Zimbabwean market by undercutting prices or becoming a price leader.

For consumers, the costs are in terms of higher prices and less variety.

Hence, the Fed s intervention in the housing market is really an intervention in the government bond market the purported switch from buying mortgages to buying government bonds is of little significance.

The bond market and share prices have responded to all of this bad news in a predictable fashion.

The result of a decrease in supply and an increase in demand is higher prices.

The scrap market, traditionally the most volatile, has maintained its unsteadiness, with prices increasing almost threefold in some countries in 2004 before falling again.

Indeed, the bond market channel is unlikely to boost growth.

In some of the countries visited government intervention in market prices was introduced.

The result is higher prices and no job creation.

The yen s rising value raises the yield on Japanese bonds relative to the yield on bonds denominated in other currencies.

So rising prices feed back into more rising prices, and the cycle repeats again and again for a while.

Medium term fiscal reform, for its part, will be pushed by bond market vigilantes.

Today's housewives do nothing but complain of high prices.

The result of this relative price shift is headline inflation.

An expectation that interest rates will be high sometime in the next decade should mean high interest rates on long term bonds today.

Indeed, the stock market is an important component of any modern economy.

The US uses only half as much oil per dollar of production as it did before the price spikes of the 1970 s.

Bond market vigilantes already have taken aim at Greece, Spain, Portugal, the United Kingdom, Ireland, and Iceland, pushing government bond yields higher.

Surprisingly, the bond market still seems almost oblivious to this risk.

Price rises have been a major trigger of the discontent this year in the Middle East and North Africa.

Until there is a market for such bonds, we cannot know what the price will be.

To be sure, there is no proof that QE2 led to the stock market rise, or that the stock market rise caused the increase in consumer spending.

The embargo drove up prices and unleashed a period of inflation and stagnation worldwide.

Bond yields in southern Europe were rising, and a pervasive sense of apprehension and fear cloaked governments in European capitals.

Eventually, China s rapid growth will have to be reflected in a significant rise in its currency, its domestic price level, or in both.

Encouraging participation by foreign investors is a quick way to jump start local bond market activity.

Rising prices directly affect these countries ability to feed themselves at an acceptable cost.

One argument that economists use is that higher prices are due to the weak dollar.

Again, high prices are helping in ways that Western politicians seem afraid to contemplate.

A monopoly is poison for a market economy, because it increases prices and decreases volume.

It increases prices and decreases volumes even more than one comprehensive monopoly incorporating all suppliers in that chain would have done.

OPEC might be correct to blame American policies and speculators for higher prices.

Pearl too has another price hike to report on and writes about a Kuwaiti juice company increasing the price of juice.

Nor is there any pressure from bond markets to concentrate the minds of policymakers.

Oil prices rose throughout 2004, with accelerating fluctuation as prices peaked in August and October.

If foreign holders of dollar bonds become concerned that the unsustainability of America s situation will lead to higher interest rates and a weaker dollar, they will want to sell dollar bonds.