Wow, this is crazy.

I think Germany has done this before in the last few years.
And I read a couple other countries are doing this as well.

The article is dated back in Feb 25, 2015.

quote:
On Wednesday, Germany issued its first 5-year bond ever with a negative yield, which means investors are making a loss by loaning money to the German government. It sold €3.3 billion ($3.7 billion) of debt at a negative yield of 0.08%, according to the country's Finance Agency.

quote:
Investors appear willing to buy at these rates because of falling inflation in Europe. There are even concerns about deflation, which could trigger bigger problems like a recession. The idea is that these German bonds would lose less value than other assets.

WUT!!!

LINK

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Posted by euphemus

Member since Mar 2014

536 posts

Posted on 4/13/15 at 8:35 pm to Reubaltaich

So much for the Zero Lower Bound. Are they in this predicament because the Euro Zone didn't do QE faster? On a related note, if the US Fed followed the so-called Taylor Rule for setting interest rates, at the height of the financial crisis the rule would have told the Fed to set interest rate at like -4% or something ridiculous like that. Just imagine a world in which the interest rate is -4%. Wow...

This post was edited on 4/14/15 at 5:15 am

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Posted by Reubaltaich

A nation under duress

Member since Jun 2006

4962 posts

Posted on 4/13/15 at 9:24 pm to euphemus

I am not one the zerohedger types but this has got me shaking my head

This is really perplexing. Seems like the Germans would be better off putting their money under their mattresses.

It would crazy to see the Fed set rates that low.

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