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.
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