Bond-buying programs by the worlds central banks have already driven the total amount of debt with yields below zero to a record of $13 trillion. RTs 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 countrys economy.
“Weve 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 dont issue their own currency,” Auerback claimed.[embedded content]
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 cant predict three-to-six months ahead, but these countries […] can manage to forecast whats going to happen over the next hundred years – its incredible,” he says, emphasizing that, despite predictions, these bonds couRead More