Negative Yields and The ZLB Mar 3, 2015
The sky is falling! Or, well... bond yields are at any rate. Germany recently issued some 5-year notes at a negative yield, and several other European countries have bonds whose yields are currently negative. See here for some good discussion on why and what it means for financial markets. One very interesting point was made close to the end of the article I linked to: that bond funds (mutual funds that only or largely invest in bonds) will keep buying whatever bonds are available because of the idle cash they have. Legally, at least in the U.S. and Canada, a...
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