Thursday, April 14, 2016

Understanding Negative Interest Rates
Sober Look report on negative interest rates, analyzing prevalence & implications .. "Negative Interest Rates (NIRs) are part of a long list of unconventional monetary policy moves which include purchases of government bonds, purchases of mortgages and other asset-backed securities,forward guidance and currency devaluations. To date, these efforts have failed to stimulate growth .. In a sense, governments have been struggling to shake off slow growth and deflation with one hand tied behind their backs .. NIRs have permeated the banking world, especially in Europe and Japan and by all accounts this is not just a temporary condition. Subzero rates now extend into the longer end of the yield curve as the demand for government debt continues to remain strong. Reasons vary by investor groups as to why they participant in what is , on the surface, a counter-intuitive investment strategy."
LINK HERE to the report

2 comments:

epic research said...

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Anonymous said...

Government bonds are supposed to be riskless ASSETS, not riskless LIABILITIES ..... heh heh heh.

Central bank policy would seem to be about as stupid as central governments ... massive refugee influx changing long term ethnic composition and society values to name just one aspect of gross political mismanagement in the name of warm fuzzy feelings.

According to the article above the odds are that the British will stay in that lunatic asylum. NUTS