‘Demand would be enormous’

2. Bonds: the market

Around the world, investors are fleeing from stocks and shares. Spooked by the prospects for western economies in the wake of the credit crunch, they are putting safety first. The objective for many is not, as it has been for the past half-century, capital accumulation. It is simply capital preservation.

This shift in sentiment has given any institution that can guarantee even a very low return on capital a strong hand. Despite losing its AAA credit rating, the US government, for example, can still borrow money at record low interest rates of around 2 per cent a year.