🔥 Negative Yield Bonds hits record!

in HODLlast month


Today I read an article from Bloomberg about negative yield bonds. The article was written last December but I assume that the numbers will be almost identical right now.

Currently 18 Trillion USD are sitting in negative yield, that means that they are buying bonds and not having any profit with them. In fact they are investing money to lose money.
It doesn't make sense for the average investor to invest in something that will give you a negative yield, but when you are storing large amounts of money, its a common practice nowadays.

According to Bloomberg:

About $1 trillion of bonds have seen their yields turn negative this week, meaning 27% of the world’s investment-grade debt is now sub-zero.

Here you have a chart of the Bloomberg Barclays Global Aggregate Negative-Yielding Debt Index evolution.



There is a lot of interest from institutions to buy this bonds because they don't see opportunities to invest somewhere else.
This usually is bad news, but you know, the FED will print as much money as needed to save the economy. The money printer has gone Brrrrrrrrrrrrrr!

If they don't allocate the money in the correct spots, this can end really bad. "Zombifying" businesses that are unsustainable is not the way to go. They should be very careful about where this money is being allocated, and I'm not sure they are doing it correctly.

There is still a lot of uncertainty about the COVID crisis worldwide, here in Europe we are seeing more and more cases again, and we have a lot of mobility restrictions. It looks like the recovery expected for this 2021 will not be that fast.

While all of this happens you still have the cryptocurrency market to stay entertained.

Have fun out there! 😊


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Sounds to me like we need a reset. However, as always, it will be a disorderly one. For some reason there isn’t a problem until it becomes one. Markets speak daily yet few can comprehend the signals given.

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There isn't s problem until it becomes one

I fully agree on that. Things are getting interesting.

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