A bold step into the unknown – are we heading for hyperinflation?

QE has done very well at heading off depression. But continuing with it now risks disaster. So what should investors do? James Ferguson reports.

I have long argued in these pages both that quantitative easing (QE) is not inflationary, and that MoneyWeek readers should buy government bonds: gilts, bunds and US Treasuries. This advice has served those who followed it well.

Last year, the best-performing asset class in the world, beating even gold, was developed-world government debt. Since February last year, the yield on the benchmark ten-year US Treasury bond has fallen from 3.8% to 1.8% (when bond yields fall, prices rise) and the ten-year gilt yield has dropped from 3.9% to 1.9%.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

James Ferguson qualified with an MA (Hons) in economics from Edinburgh University in 1985. For the last 21 years he has had a high-powered career in institutional stock broking, specialising in equities, working for Nomura, Robert Fleming, SBC Warburg, Dresdner Kleinwort Wasserstein and Mitsubishi Securities.