NIRP-Finity? Negative-Yielding Debt Is Back Above $8.5 Trillion

Ok, so this probably won’t come as a surprise to anyone, but you should note that the market value of the world’s negative-yielding debt has moved above YTD highs after drifting lower at the end of June:

RecordNIRP

(Bloomberg)

The total now sits at some $8.6 trillion as still lackluster incoming inflation data combined with heightened geopolitical risks pushed investors back into safe securities.

Rather than put you through the wringer in terms of everything that’s wrong with this, we would simply point out that by all kinds of measures we’re late cycle. And that raises questions about where rates are going to go if central banks have to ease to combat the next downturn.

More poignantly: have we passed the point of no return in terms of escaping from NIRP?

And if so, how far into negative territory can central banks push rates? Further, what are the consequences in terms of supercharging the hunt for yield even more than it’s already been supercharged? How big will the risk asset bubbles get?

On that note, we’ll close this short post with one more chart for you to ponder.

NetLeverage

 

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2 thoughts on “NIRP-Finity? Negative-Yielding Debt Is Back Above $8.5 Trillion

  1. Well maybe “they” keep going until something makes “them” stop. It would seem that the “creation” of money surpassed conventional monetary wisdom some time ago. Why stop now?

    And Curt this seems like good advice; however so far gold has likely not moved as much as some might expect, based on the creation of fiat.

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