What A Steal

In more ways than one. Investors are now paying for the privilege of lending Germany money.

Bonds

On Wednesday, Germany issued its first 5-year bond ever with a negative yield, which means investors are making a loss by loaning money to the German government. It sold €3.3 billion ($3.7 billion) of debt at a negative yield of 0.08%, according to the country’s Finance Agency.

If it sounds backwards, that’s because it is.

Investors appear willing to buy at these rates because of falling inflation in Europe. There are even concerns about deflation, which could trigger bigger problems like a recession. The idea is that these German bonds would lose less value than other assets.

PS: Thanks for the way cool “V for Varoufakis” video, A.K.

 

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