Negative Yielding Debt

[errolanderson]

Negative yielding debt is now a new record at $13.75 trillion. This represents about 25 percent of all global sovereign debt . . . . Central banks built this beast, now they are almost entirely powerless.

A footnote; In the past three (3) years, the U.S. has added an astronomical $3.5 trillion to their
public debt which now exceeds $22 trillion . . . and rocketing.

The global credit cycle is so over (IMO) . . . .

[GALAXIE500]

Negative yielding debt is now a new record at $13.75 trillion. This represents about 25 percent of all global sovereign debt . . . . Central banks built this beast, now they are almost entirely powerless.

A footnote; In the past three (3) years, the U.S. has added an astronomical $3.5 trillion to their
public debt which now exceeds $22 trillion . . . and rocketing.

The global credit cycle is so over (IMO) . . . .

It makes you wonder how long it's going to take before the whole system is going to crash. When the USA fails , we will go down with them I fear. The idea of "prudent spending" has gone out the window, along with "responsible government".

[chuckChuck]

Negative yielding debt is now a new record at $13.75 trillion. This represents about 25 percent of all global sovereign debt . . . . Central banks built this beast, now they are almost entirely powerless.

A footnote; In the past three (3) years, the U.S. has added an astronomical $3.5 trillion to their
public debt which now exceeds $22 trillion . . . and rocketing.

The global credit cycle is so over (IMO) . . . .

In the past three (3) years, the U.S. has added an astronomical $3.5 trillion to their
public debt which now exceeds $22 trillion . . . and rocketing.

Thanks Errol for pointing out in detail what I have mentioned briefly a few times. The US debt to GDP ratio is currently worse than Canada's and ours is projected to fall while theirs is expected to increase.

Trump supporters on this site seem to ignore Trump's mismanagement of government spending and debt increases, but complain loudly about Liberal spending. Pure partisan politics at play.

It's also important to point out that the revenue side of the equation is a big part of the problem. Corporations and high income earners don't want to pay more taxes and shelter a lot of their income offshore. If you keep spending and cutting taxes,then borrowing is the only way out. This a world run by the rich and powerfull like Trump and his friends. Tax cuts for the rich and crumbs for the rest.

[ajl]

Not sure where you get the 3.5 T from as the deficits for the last 3 fiscal years are 896 in 2019 (projected as that ends Sept 30, 2019) 779 in fiscal 2018 and 666 in fiscal 2017. An alarming 2.34 T but not 3.5 T as you stated. And fiscal 19 will end lower than the latest projection since interest rates on longer dated Treasuries are lower than when projections where made. Comparing US federal debt to canuskitanian federal debt is an apple to oranges comparison for 2 reasons: much of our debt shows at the provincial level and the US has a much more diverse economy so their GDP projections are much less fake than ours. Negative interest debt is a European phenomenon and Europe is completely hopeless. Wonder what is paying pensions in much of Europe? When the US sinks, the rest of us will have been on the bottom for some time.

[farmaholic]

Who didn't line up for their near free money loan over the last ten years?

What did they expect? Governments and the public to stop borrowing when interest rates should have probably been 2-3 times higher than they have been.

And savers could have realized a return higher than barely above inflation, if they ever could have in the plain old money savings market of GICs and interest bearing savings accounts.

[jazz]

Rates arent going up errol. Thats been tried. More likely a move to more real assets and a rise in their relative value. I would never in a million years buy govt denominated debt. Its just a mechanism for more debt and higher taxes in the future to pay that measly yeild.

[macdon02]

"But it's safe" remember in 08 when regulation got changed and pension funds were required to own more of this stuff % wise because of the setback in equities? It isn't the US that's most vulnerable to the debt, it's the ROW as they were borrowing in USD. If Trump figures out a strong dollar is his nuclear option against China and he hits the button, everyone has a problem except him.

It's not the debt itself that's an issue, it's servicing it

[farming101]

“Markets can remain irrational longer than you can remain solvent.”

― John Maynard Keynes

If you don't play by the rules anything can happen....

[farmaholic]

Does Greece still exist today?
So does it really matter if the any debt can be serviced or not?
Personal or sovereign or foreign?

I know I am in way over my head in this thread. Fire away.

[Horse]

Negative debt intrest ? does that mean they will pay me to take thier money??

[errolanderson]

Does Greece still exist today?
So does it really matter if the any debt can be serviced or not?
Personal or sovereign or foreign?

I know I am in way over my head in this thread. Fire away.

Worst debt to GDP countries (believe this current order).

1. Japan
2. Greece
3. Sudan
4. Venezuela
5. Lebanon
6. Portugal
7. Italy
8. U.S.A.

farmaholic . . . does debt matter and need to be serviced? . . . yes. We will all have a reality check and find out why (IMO). It will severely cost the next generation . . . our kids and their kids.

[biglentil]

Does Greece still exist today?
So does it really matter if the any debt can be serviced or not?
Personal or sovereign or foreign?

I know I am in way over my head in this thread. Fire away.

Thats modern monetary theory, that we can have our cake and eat it to. Its a free lunch. But debts are always repaid either by the borrower or the lender.

[errolanderson]

Negative debt intrest ? does that mean they will pay me to take thier money??

yup . . . .

[macdon02]

Does Greece still exist today?
So does it really matter if the any debt can be serviced or not?
Personal or sovereign or foreign?

I know I am in way over my head in this thread. Fire away.

It's a good point, it's all relative. There's a distinction between govt debt and private. When govt can't borrow, taxes go up. I think it's safe to say if the US govt can't borrow, Canada will be in the same boat. Errol are you bullish or bearish USD? Where do you see the $ going if there's a loss of confidence in bonds? Powell is still letting repurchased debt expire, whereas Draghi isn't, he's rolling it. Fwiw there's talk of a "peg" in rates on govt bonds while letting private bonds float. The CB's are in a corner and Powell will cut here imo. We are closer to the 30s then 1980s here. There's certain relationships that are believed to be true by traders, ie gold(commods) up dollar down, dollar up euro(&rest of the basket)down, gold up yen down, We are on the cusp of this all getting shredded imo). We are in a short period where buying anything is a win. Especially if your home currency is not USD

[bucket]

Thats the modern monetary theory, that we can have our cake and eat it to. Its a free lunch. But debts are always repaid either by the borrower or the lender.

Anyone think ILTA grain will pay their debts????

I am thinking farmers will be paid by other farmers checkoffs to the CGC....and FCC/HSBC will take a haircut...