The black hole engulfing the world’s bond markets

Bloomberg/John Ainger/7-12-2019

“There’s a multitrillion-dollar black hole growing at the heart of the world’s financial markets. Negative-yielding debt — bonds worth less, not more, if held to maturity — is spreading to more corners of the bond universe, destroying potential returns for investors and turning the system as we know it on its head. Now that it looks like sub-zero bonds are here to stay, there’s even more hand-wringing about the effects for mom-and-pop savers, pensioners, investors, buyout firms and governments.”

USAGOLD note:  A solid overview on the impact and consequences of negative rates on financial markets. . . .Though gold is not mentioned, the potential for crisis is. The mind naturally drifts to thoughts of a safe haven asset that also provides the potential for upside returns in a zero per cent world.

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