Will the UK vote to leave the European Union? Who is buying negative yielding 10 year German Bond? Don’t know, but the markets are not going to be boring this summer – let’s go to the links:
- Bloomberg – German 10-Year Yields Below Zero, Pound Slides on Brexit Risk
- CNBC – Germany’s 10-year bund move shows lack of confidence in ECB
- Business Insider – A Brexit ‘would open Pandora’s box’ in Europe
And what about Japan?
- Bloomberg View – As Central Banks Meet, Japan’s Faces the Toughest Dilemma
I don’t know how this will all work out – but I believe we will be dealing with all the unintended consequences of zero and negative interest rates for years to come. For example – I don’t see how an Insurance Company or Pension Fund can function at a negative interest rate? Could someone explain that to me? What would they possibly invest in to guarantee their obligations are covered? Also, how do you get a Mortgage? Does the Bank pay you to borrow money? Truly living in a Bizarro World:
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