Jim Grant, author of Grant’s Interest Rate Observer, keynote at NYSSA
Bonds are what they are. Today, the are less than what they are. It is said—nothing is ever new under the sun of finance… but we do live in a unique time in 2 critical ways— interest rates and monetary moment.
A few years, ago a book appeared called A History of Interest Rates… The book is a chronicle of 5,000 years of interest rates… Not a line about negative yields. There is reference to negative treasury bill rates… Did you find any instances of negative yields on fixed income securities in your search of 5,000 years. From Hamrabi to Ben S. Bernanke, negative yields were non existence. Now, today they are here today in plethora.
2/3 of those are Japanese. A Trillion of French and a Trillion of German. Every single Swiss, now yields less than zero. And yet, people seem to want them more for that.
Fitch press release characterized the demand for these assets as the demand for ‘safe’ assets. For all the world, the bond market seems to have ascent the notion that sovereign debt is intrinsically and inherently indisputably safe.
I was born a few months after yield made their lows in April of 1946…
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