Dilettante economist: the harbinger of negative rates

Now, I just succeeded in conceptually understanding what it means to have negative rates…



This week we have the real world example of bonds being sold at negative rates, which portends an environment in the near future with few attractive investment options….  that’s the CW.

I guess I understand the necessity of seeking shelter for your money such that you have to manage it during anxious economic times.  A thing I don’t get is, if faced with anxiousness and lack of appealing long term investments, then why don’t you keep your money as, you know… money.   Don’t commit to a bond with a negative interest rate.  Or buy land.  How often do ten year land investments go bad (?). I suppose a lot of this money needs to produce interest payments.  Does a negative paying bond make an interest payment?

On the general outlook…. the direness of the economic situation isn’t at all apparent to me.  Consumption is kind of modest in most places, but such the experts think there’s a rough patch ahead you’d figure this anticipates a decrease in consumption.  Consumption is going to go down from here?  It’s hard to see that potentiality, what with the modest consumption we have.

BTW gas is back at $2/gal essentially.


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