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posted by martyb on Sunday July 14 2019, @03:09AM   Printer-friendly
from the You-pay-me-to-hold-your-money? dept.

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.

https://www.bloomberg.com/news/articles/2019-07-13/the-black-hole-engulfing-the-world-s-bond-markets-quicktake?srnd=premium


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  • (Score: 0) by Anonymous Coward on Sunday July 14 2019, @04:37PM (1 child)

    by Anonymous Coward on Sunday July 14 2019, @04:37PM (#866936)

    Wrong.

    Food today is half the price it was in 1960, adjusted for inflation.

    Computers -- when was the last time anyone paid $3000 for a Windows 3 machine on an Intel 386 with 1 MB ram and 40 MB HD? (I did, in 1992)

    Remember a couple of years ago when gas was $4/gallon?

    Housing... ok, you got me there. But the energy and water are both cheaper than they were 30, 40 and 50 years ago in real, inflation adjusted dollars. My $200K home is the same size as my dad's $40K home was in 1968. Adjusted for inflation, my house is still more expensive, but boy, the amenities are spectacular.

    Keynes was right. Automation and specialization has made everything cheaper. We don't have to work so hard anymore. We could all survive just fine working 2 or 3 days a week. The only problem is we'd have to live a 1930's lifestyle. No AC, tiny house, eat the same home-cooked meals every day, have maybe three suits of clothes...

  • (Score: 0) by Anonymous Coward on Sunday July 14 2019, @05:28PM

    by Anonymous Coward on Sunday July 14 2019, @05:28PM (#866944)

    Sounds great, I vote for the 30's lifestyle. I really do not feel the need to keep up with the Joneses.