{"id":47877,"date":"2019-08-18T06:13:54","date_gmt":"2019-08-18T11:13:54","guid":{"rendered":"https:\/\/olduvai.ca\/?p=47877"},"modified":"2019-08-18T06:14:19","modified_gmt":"2019-08-18T11:14:19","slug":"12-reasons-why-negative-rates-will-devastate-the-world","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=47877","title":{"rendered":"12 Reasons Why Negative Rates Will Devastate The World"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.zerohedge.com\/news\/2019-08-17\/12-reasons-why-negative-rates-will-devastate-world\">12 Reasons Why Negative Rates Will Devastate The World<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">It has been a thesis over 20 years in the making, but with every passing day, SocGen&#8217;s Albert Edwards &#8211; who first coined the term &#8220;<em>Ice Age<\/em>&#8221; to describe the state of the world in which every debt issue ends up with a negative yield as capital markets and economies collapse into a deflationary singularity &#8211; is that much closer to having the victory lap of a lifetime. Although, we doubt he is happy about it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Commenting on the interest rate collapse he has been (correctly) predicting ever since he first observed Japan&#8217;s great bubble bust of the 1980s and which resulted in both NIRP and QE, and which he (correctly) expected would&nbsp;<a href=\"https:\/\/www.zerohedge.com\/news\/2019-07-17\/were-never-going-go-away-zero-presenting-kyle-bass-latest-trade\">spread across the rest of the world<\/a>, leading to a &#8220;Japanification&#8221; of every major bond market&#8230;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com\/s3fs-public\/inline-images\/edwards%20iceage_1.jpg\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">&#8230; Edwards said that what bond markets are telling us is &#8220;that the cycle is ending with the central banks having failed to drive core CPI inflation higher.&nbsp;<strong>So Japanese-style outright deflation lies ahead at a time when western economies have piled debt sky high<\/strong>.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Needless to say that&#8217;s not good, not least of all because we now live in a world in which the bond universe with negative yields continued to grow at an exponential pace, rising rapidly over the past two weeks and reaching a record $16.4 trillion&#8230;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com\/s3fs-public\/inline-images\/negative%20debt%20tn.jpg\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">&#8230; rising\u00a0 significantly above the previous mid-2016 record high of around $12.2tr. The expansion of the universe of negatively yielding bonds as a percentage of total is shown below: as of the last week, this proportion increased further to around 30.0%, above the mid-2016 record high of 25.8%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>12 Reasons Why Negative Rates Will Devastate The World It has been a thesis over 20 years in the making, but with every passing day, SocGen&#8217;s Albert Edwards &#8211; who first coined the term &#8220;Ice Age&#8221; to describe the state of the world in which every debt issue ends up with a negative yield as [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5150,558,1389,662,4318],"class_list":["post-47877","post","type-post","status-publish","format-standard","hentry","category-economics","tag-albert-edwards","tag-negative-interest-rates","tag-nirp","tag-quantitative-easing","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/47877","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=47877"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/47877\/revisions"}],"predecessor-version":[{"id":47878,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/47877\/revisions\/47878"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=47877"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=47877"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=47877"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}