According To Bloomberg, The World Now Holds $15 Trillion In Negative Yielding Debt



The idea of a negative yielding bond goes beyond counter intuitive; this is teetering on insanity! Just imagine the reaction you’d get if you told somebody 30 years ago that people would be paying governments to accepts their loans, and not the other way around!

Think about it this way: when you loan somebody money, not only is there a risk of default, but there is also an opportunity cost — meaning you risk missing out on other potentially better investments in the future because your money is tied up somewhere else!

Granted, when you buy a government bond, the risk of default is extremely low, Nevertheless, there still exists an inflation risk.

Over a long enough period of time, currency dilution has the potential to significantly reduce the real tangible value of your loan, which tends to get underestimated by investors.

In 1966, Carroll Quigley, a tenured professor at Georgetown University and a highly respected historian at that time, took note of this in his book, “Tragedy and Hope”.



If you’d like to read more about this story, click on the image below.



FAIR USE

Copyright Disclaimer under section 107 of the Copyright Act 1976, allowance is made for fair use for purposes such as criticism, comment, news reporting, teaching, scholarship, education and research.
Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use. Read more

One thought on “According To Bloomberg, The World Now Holds $15 Trillion In Negative Yielding Debt

Leave a Reply

%d bloggers like this: