Category Archives: MUST READ COMMENTARY

$5.5 TRILLION NEGATIVE YIELDING GOVT BONDS

# 5th February :  Above  Chart added reflecting negative Govt Bond Yields  across the yield curve notified by  The Daily Shot 

## Note Added 3rd Feb 2016:  Link to Bloomberg Quick Take on negative interest rates  – Link to Goldwatcher comment on the end of the long term debt cycle and negative interest rates

The total balance of government bonds with negative yields hit $5.5 trillion after the BOJ action on Friday according  to JPMorgan (via the Financial Times) and noted in The Daily Shot letter today

I posted a comment on www.thegoldwatcher.com   yesterday on approaching the end of the debt supercycle that started with the end of WW2 over seventy years ago. The comment addresses Ray Dalio’s warning that policy makers could find themselves pushing against a string.

Monetary policy works with a lag. When central banks were fighting inflation the analogy of pulling a stone with an elastic band was a popular way of explaining  the lag – you pull and pull and nothing happens ….. then the elastic tightens and wham,  the stone rockets back!

What happens when central banks find themselves pushing against a string?   Trillions of dollars and other currencies with negative yields?