Fragility Increases

Investors Ponder Negative Bond Yields in the U.S.

A steep slide in U.S. government-bond yields last week wrong-footed investors and left some pondering what was once unthinkable: whether interest rates in America could one day turn negative.

Historically, people who lent money out got more money back later, a way to compensate for inflation, for the risk of not being repaid and for forgoing other investments.

Now, though, there is more than $15 trillion in government debt around the world with negative yields. That means, essentially, that savers holding these bonds are paying the government to store their money.

And:

“We’re a bit perplexed about the level of yields,” said Andre Severino, head of global fixed income at Nikko Asset Management. “It’s kind of like Armageddon is being priced in.”

Boldfaced emphasis added by me.

Pressure at a hell of a lot of stress points — especially here in the U.S. — are increasing. And there’s not a lot of buffer to prevent fractures.

Network: Things Are Crazy

I sense that we are at the edge of an abyss. We put ourselves there. How do we talk ourselves back from it?

Previously here:

Inside The House?
What’s Next? Again
Two Very Strange Financial Stories
Tick Tick Tick
Is This A “What’s Next?”
Midtown Manhattan Power Outage: “What’s Next?”
2020: Year Of The Ant
2020 Is Coming. Be An Ant. Not A Grasshopper.

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