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: 3, Interesting) by Rupert Pupnick on Monday July 15 2019, @01:14PM
Doesn’t it? Print more money. Send everyone in the country a check from the US Treasury for $100. Repeat quarterly as necessary.
Wouldn’t this create an offset to the deflationary pressure people are so concerned about?
If this is true, then there are at least three reasons why it hasn’t been done:
1) It doesn’t work
2) What’s happening in the bond markets is not really a problem
3) It’s part of some nefarious scheme to get more control over the population
Any other possible explanations?