No. of Recommendations: 5
There remains the confounding question about the existence of negative interest rates. In the past the analysis was centered on whether the coupon rate would give a return greater than inflation. Today there is more than $13 Trillion of public debt which trades at prices that guarantee a negative return in absolute terms, without considering inflation. I have never herd of an economic theory which could expect that. The current market includes debt priced in a way that the lender pays the borrower for taking the investment while accepting an unsecured promise from a government to give back less money in the future, all based upon fiat currencies with unlimited supply. How does that compute in any economic model?

Just saw an article about Austria having a new issue of bonds with 1% yield and 100 year term.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.