More NIRP.....................from Rico

Negative-paying FIAT IOU's.

 

Germany just issued 5-year government debt (bonds, called Bunds) at a negative 0.8% rate.

- Buyers jumped at the chance to pay the government to hold their money for them.

 

Does that make any sense to you?

 

Consider that preserving 'some' wealth in the face of the ECB's pursuit of EUro QE might have something to do with it.

- A return of some of your money has just become more important than a return ON your money in that context.

- And, with Greece just admitting it can't ever repay its bonds, betting that Germany can seems a wee bit safer alternative.

 

The best possible outcome for these investors is to hold these bonds to maturity and  suffer a guaranteed loss in five years.

- Their options get worse from there.........

 

And yet no one is asking WHY the German Government is repatriating its Gold while peddling bunds (IOU paper) to buyers.