3 ms·
> Real yields of reserve currency sovereign bonds are negative and the lowest ever. Real yields of cash are even worse though not as negative as they were in th
by boyka 6y ago
> Real yields of reserve currency sovereign bonds are negative and the lowest ever. Real yields of cash are even worse though not as negative as they were in the 1930-45 and 1915-20 great monetization periods.
This I cannot comprehend. Can someone explain to me how holding cash yields less than holding a bond at negative rates that will return me less cash?
- CorrectHorseBat 6y agoHolding cash costs money too since interest is negative. If you're talking about actually physical cash, you will have to pay for a vault and security to store and move the cash.
- AnimalMuppet 6y agoLet's say inflation is 2%, and and bonds are returning 1%. That means real (that is, accounting for inflation) bond returns are -1%. But holding cash returns -2% (again after accounting for inflation).