Start the engines, Angela

“TO THE lifeboats!” That is the stark message bond markets are sending about the global economy. Investors are rushing to buy sovereign bonds in America, Germany and a dwindling number of other “safe” economies. When people are prepared to pay the German government for the privilege of holding its two-year paper, and are willing to lend America's government funds for a decade for a nominal yield of less than 1.5%, they either expect years of stagnation and deflation or are terrified of imminent disaster. Whichever it is, something is very wrong with the world economy.

That something is a combination of faltering growth and a rising risk of financial catastrophe. Economies are weakening across the globe. The recessions in the euro zone's periphery are deepening. Three consecutive months of feeble jobs figures suggest America's recovery may be in trouble (see article). And the biggest emerging markets seem to have hit a wall. Brazil's GDP is growing more slowly than Japan's. India is a mess (see article). Even China's slowdown is intensifying. A global recovery that falters so soon after the previous recession points towards widespread Japan-style stagnation.