Yesterday, Ben Carlson of “A Wealth of Common Sense” asked how it could be that more than $13 trillion of government debt has a negative yield. As someone who lived in Switzerland for more than two decades I can tell you that this situation can last for many years, yet, one has to wonder who buys these bonds? In the case of Switzerland it is almost exclusively pension funds and insurance companies who have to own a lot of government bonds for regulatory reasons. The effect these regulations have on the yield curve can be quite substantial. So here is a partial answer to Ben’s questions:
What drives long-term bond yields?
What drives long-term bond yields?
What drives long-term bond yields?
Yesterday, Ben Carlson of “A Wealth of Common Sense” asked how it could be that more than $13 trillion of government debt has a negative yield. As someone who lived in Switzerland for more than two decades I can tell you that this situation can last for many years, yet, one has to wonder who buys these bonds? In the case of Switzerland it is almost exclusively pension funds and insurance companies who have to own a lot of government bonds for regulatory reasons. The effect these regulations have on the yield curve can be quite substantial. So here is a partial answer to Ben’s questions: