I actually meant to include this in the original comment.
I disagree with you in this respect. Investors do have a lot of money, and they do need vehicles in which to invest their money. But when equities are not attractive, they go for safer bets: treasury bonds.
So in essence, it is an issue of trust. Investors would rather place their money in equities as opposed to trusts because the yield is so low, but they fear placing money in equities.
I'm not sure I understand your argument about the scarcity of liquid instruments. The number of available equities and money market instruments hasn't shrunk. And there are bonds available from other currencies.
I still don't think it's trust. It's desperation. Equities aren't really in the same class as government bonds. But the holders of all this cash (I won't even call them investors, but rather folks left holding the bag after a gigantic monetary expansion) can't look to equities for a better rate, because in order for any instrument to provide a reliably high yield, the money supply would have to grow even faster, and it's already grown too fast.
I disagree with you in this respect. Investors do have a lot of money, and they do need vehicles in which to invest their money. But when equities are not attractive, they go for safer bets: treasury bonds.
So in essence, it is an issue of trust. Investors would rather place their money in equities as opposed to trusts because the yield is so low, but they fear placing money in equities.
I'm not sure I understand your argument about the scarcity of liquid instruments. The number of available equities and money market instruments hasn't shrunk. And there are bonds available from other currencies.