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 Something Crazy Is Happening to Swiss Bonds, and It’s a Sad Sign for the World Economy

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Something Crazy Is Happening to Swiss Bonds, and It’s a Sad Sign for the World Economy Vide
PostSubject: Something Crazy Is Happening to Swiss Bonds, and It’s a Sad Sign for the World Economy   Something Crazy Is Happening to Swiss Bonds, and It’s a Sad Sign for the World Economy Icon_minitimeFri Jul 08, 2016 11:42 pm

...As Quartz reports Thursday, “around a third of all developed-country government debt—or more than $7 trillion, in terms of market value—is now trading at negative yields,” meaning that buyers are willing to pay more for these bonds than they will eventually get back if they hold them to maturity. This is remarkable. Countries like Germany have been selling short- and midterm debt at negative yields for a while, but now it’s happening with bonds dated for 10 years or longer. Investors are basically banging down the door for the guarantee that they will only lose a little bit of money over the next decade or two.


Something Crazy Is Happening to Swiss Bonds, and It’s a Sad Sign for the World Economy 174714919-an-alphorn-player-performs-on-july-28-2013-in-nendaz.jpg.CROP.promo-xlarge2

The most mind-blowing example of this trend is Switzerland. Last week, yields on all of its government bonds, out to 50 years, turned negative. Investors are now expected to pay for the privilege of lending money to the Swiss for a half-century at a time. Other countries are getting nearly as good deals. Fifteen-year German and Japanese bond yields have also drifted below zero. Even economically wounded Spain can borrow for a few years at a time and theoretically make a profit. It's like a bad financial-world play on a Yakov Smirnoff joke: In Switzerland, lender pay you!

http://www.slate.com/blogs/the_slatest/2016/07/07/investors_are_paying_to_lend_switzerland_money_for_50_years_at_a_time.html?google_editors_picks=true
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Something Crazy Is Happening to Swiss Bonds, and It’s a Sad Sign for the World Economy

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