Saturday, April 11, 2015

Interested in some 100 Year Bonds?

Okay, I know Simon Black from Sovereign Man is quite out there on the fringe, but he make's an absolutely fantastic point with his recent post.

As if negative 10-year Swiss bonds weren't ridiculous enough, this will really get you to shit yourself.

100 year bonds in USD isn't really as crazy as it sounds if you swim in the mainstream. But throw in it's massive debt burden and it's rapidly deteriorating status as the global trade currency, you have to be pretty bold to make a bet like that for something 100 years out into the future. I'm pretty sure we see hyperinflation before the bonds get redeemed. Since there's only 2 ways to get out of massive debt - inflate it away, or default. Paying it back is completely out of the question.

100 year bonds in Euros. Madness. If we see still see the Euro in 2030, I'll say it's a roaring success already. From my understanding, the Euro is fundamentally flawed and it's doomed to fail. But hell, what do I know?

Actually, that makes the pound century bond the least stupid of them all.

I wouldn't touch any of these things with a 10 foot pole.

1 comment:

Observe the house rules.