'Height of insanity’: RT’s Keiser Report negative on idea of negative yield bonds
Bond-buying programs by the world’s central banks have already driven the total amount of debt with yields below zero to a record of $13 trillion. RT’s latest Keiser Report looks at how far the situation could go below that point.
Max Keiser discussed the issue with Marshall Auerback, Research Associate at the Levy Institute. The expert blasted the strategy as “the height of insanity,” stressing that zero yield bonds are a direct way to a major bust for the country’s economy.
“We’ve reached the limits of how much monetary gymnastics can be undertaken by central banks because you are literally paying the governments to hold [these bonds] and, being part of the Eurozone, these countries can be technically bust at some point because they don’t issue their own currency,” Auerback claimed.
The expert noted that adding fuel to that fire are “the hundred-year bonds” that a number of European states have issued lately, for instance Ireland and Austria.
“I can’t predict three-to-six months ahead, but these countries […] can manage to forecast what’s going to happen over the next hundred years – it’s incredible,” he says, emphasizing that, despite predictions, these bonds could get down to negative 25 per cent, it’s all “counter to growth” and “the whole thing blows up before we get to that point.”
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