A substantial article about the probabilities of negative interest rates.
https://apnews.com/f7eee4d172864885b246da733803ee6e
https://apnews.com/f7eee4d172864885b246da733803ee6e
FRANKFURT, Germany (AP) — Imagine lending money to someone and having to pay for the privilege of doing so. Or being asked to invest and informed of how much money you’ll lose.
Sounds absurd, but increasingly that’s the global bond market these days. A rising share of government and corporate bonds are trading at negative interest yields — a financial twilight zone that took hold after the financial crisis and has accelerated on fear that a fragile global economy will be further damaged by the U.S.-China trade war.
On Wednesday, for the first time ever, the German government sold 30-year bonds at a negative interest rate. The bonds pay no coupon interest at all. Yet bidders at the auction were willing to pay more than the face value they would receive back when the bonds mature.
Worldwide debt with negative rates has surged to $16.4 trillion from $12.2 trillion in mid-July and $5.7 trillion in October