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Reply to Over Half of EU is Trading Negative for 2 Yr Bonds     
Old 10-29-2015, 09:49 AM   #1
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Justin Bilyj on Over Half of EU is Trading Negative for 2 Yr Bonds
 
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Over Half of EU is Trading Negative for 2 Yr Bonds Over Half of EU is Trading Negative for 2 Yr Bonds


But what happens if one expands the Eurozone NIRP universe to include the debt of other countries including Japan, Denmark, Sweden, Switzerland and so on? Conveniently, JPM has done the analysis and finds that a mindblowing $3.6 trillion of government debt traded with a negative yield as recently as last week. This represents 16% of the JPM Global Government Bond Index, or in other words nearly a fifth of all global government debt is now trading with a negative yield, meaning investors pay sovereigns, using other people's money of course, for the privilege of buying their issuance!
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I wonder if we will start to see .5 annual p2p caps for IA's, or perhaps 1-1.5 for 5 year myga's coming up...

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So while everyone is gradually realizing that unconventional monetary policy using the bank reserve pathway simply does not work to increase broad inflation (however it does miracles for asset-price, i.e., stock market, inflation) which in a world drowning under $200 trillion in debt is the only goal, and will ultimately be replaced with the hyperinflationary endgame of simple monetary paradrops, also known as central-bank funded fiscal stimulus or "helicopter money", for now the hope is that doing more of the same which is clearly not working will finally work, and lead to the much desired jump in inflation.
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