Iron ore price, page-47532

After a decade of ultra-low interest rates and risk taking, things are going to blow up somewhere... exactly where... who cares.

The Bond volatility index (MOVE) is at levels only seen during a crisis, its highly likely to spill over into equities. You can just feel the dam wall starting to collapse.

Last week was an excellent example of how this can happen:

1. Due to ultra-low interest rates, UK pension funds had geared into long dated UK bonds to fund defined benefit entitlements;
2. Due to volatility/a collapse in those bonds, UK pension funds were margin called and started to sell assets everywhere, including equities.
3. This time around, the Bank of England stepped in to prevent that crisis from escalating further... for now, but many pension funds globally would have done the same trade in different markets... just a bomb ticking away.

Australian Superannuation Funds could be another spark... they would have enormous losses on AUD/USD hedges now and may have to sell assets to fund those hedges.

Basically, global reserve banks have created a shi**it show by forcing people to do risky stuff for a decade+ now thanks to artificially low interest rates. Everyone knew these risks would come home to roost one day, and well, that day maybe now.