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There's a multitrillion-dollar black hole growing at the heart of the world's financial markets. Negative-yielding debt -- bonds worth less, not more, if held to maturity -- is spreading to more corners of the bond universe, destroying potential returns for investors and turning the system as we know it on its head. Now that it looks like sub-zero bonds are here to stay, there's even more hand-wringing about the effects for mom-and-pop savers, pensioners, investors, buyout firms and governments.
[...] Negative-yielding debt topped $13 trillion in June, having doubled since December, and now makes up around 25% of global debt. In Germany, 85% of the government bond market is under water. That means investors effectively pay the German government 0.2% for the privilege of buying its benchmark bonds; the government keeps 2 euros for every 1,000 euros borrowed over a period of 10 years. The U.S. is one of the few outliers, with none of its $16 trillion debt pile yielding less than zero, but across the world, strategists are warning that the problem may get worse.
(Score: 2) by JoeMerchant on Sunday July 14 2019, @02:53PM (1 child)
My favorite tidbit was the depreciation twist they put in the tax code after the Trumpinator took office. Want to buy a bauble, like a sailboat "investment" somewhere tropical. Well, now, you can fully depreciate your investment in the first year, no more waiting for depreciation to approximate market values - take your tax holiday right here right NOW and make our leader look GREAT on talk radio.
Nevermind how we're going to keep this farce going, we're all gonna die soon anyway, let's have a party before the shit really hits the fan.
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Sunday July 14 2019, @03:39PM
What are you rambling about? This is a discussion of monetary policy, not fiscal policy (which is relatively unimportant and mostly a distraction).