Negative interest rates put world on course for biggest mass default in history

[LiteCoinGuy]

Negative interest rates put world on course for biggest mass default in history

 Here’s an astonishing statistic; more than 30pc of all government debt in the eurozone – around €2 trillion of securities in total – is trading on a negative interest rate.

With the advent of European Central Bank quantitative easing, what began four months ago when 10-year Swiss yields turned negative for the first time has snowballed into a veritable avalanche of negative rates across European government bond markets. In the hunt for apparently “safe assets”, investors have thrown caution to the wind, and collectively determined to pay governments for the privilege of lending to them.

http://www.telegraph.co.uk/finance/comment/jeremy-warner/11569329/Jeremy-Warner-Negative-interest-rates-put-world-on-course-for-biggest-mass-default-in-history.html

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[Bitcoiner2015]

Its coming but I bet it takes a lot longer to happen than you imagine.  Greece has been teetering for 5 years now, other dominoes haven't even started to wobble yet

[hua_hui]

I don't think negative interest rates will lead to default. The problem is ECB's QE, the failure of the Greek's austerity reforms, or economic collapse, which will trigger the mass default.   

[yayayo]

I don't think negative interest rates will lead to default. The problem is ECB's QE, the failure of the Greek's austerity reforms, or economic collapse, which will trigger the mass default.   

Why only ECB's QE and not the FED's / Japan's one? They are all alike, competing in the devaluation of currency.
At some point investors will loose confidence in governments and national bonds. Then we'll see an avalanche of selling coming in and money will flood the market causing heavy inflation.

I think we're quite close to this event. A group of speculators has already started betting against German bonds...

ya.ya.yo!

[Q7]

One thing that seems to amaze me is that these things can actually go on for a very long time. It's like a bubble getting bigger and bigger and still it is holding on and will continue to grow. Even though when the risk is there, they seem to control it very well. That's for now. But I can imagine when this collapses, it will bring everything down for sure.

[tabnloz]

One thing that seems to amaze me is that these things can actually go on for a very long time. It's like a bubble getting bigger and bigger and still it is holding on and will continue to grow. Even though when the risk is there, they seem to control it very well. That's for now. But I can imagine when this collapses, it will bring everything down for sure.

Yep, currency wars ebb and flow. can go on for 10-15 years. And this one is the biggest one of all.

[aso118]

One thing that seems to amaze me is that these things can actually go on for a very long time. It's like a bubble getting bigger and bigger and still it is holding on and will continue to grow. Even though when the risk is there, they seem to control it very well. That's for now. But I can imagine when this collapses, it will bring everything down for sure.

It is a black swan event. Most banks and financial institutions won't be prepared for this. When it does happen, there will be mayhem.

[peeveepee]

One thing that seems to amaze me is that these things can actually go on for a very long time. It's like a bubble getting bigger and bigger and still it is holding on and will continue to grow. Even though when the risk is there, they seem to control it very well. That's for now. But I can imagine when this collapses, it will bring everything down for sure.

It is a black swan event. Most banks and financial institutions won't be prepared for this. When it does happen, there will be mayhem.

Who said banks and financial institution weren't prepared?

They have been spending billions of dollar per year lobbying all the politicians, all they need is give a signal and they will get the bail out money.

[umair01]

Long time coming, the banks and financial institutions are bracing themselves, yet this has been in check and in control for a long while now, the eu need to start some severe economic reforms very quick or the collapse is gonna be magnanimus

[negafen]

Devaluing the currency encourage risk taking and creates many bubbles in the process.

[Undermood]

A negative rate of interest will make banks lend more. Central bankers  try and get people to take more risks.  It will get production keeping going and to get the economy going. It will probably create more bubbles.