It’s a big world out there, and currently we are not anywhere near normal economic circumstances. Every day that goes by, and I keep reading more and more extreme economic and financial stories.
Lately read, that the 100 year Austrian bond that was recently issued had gone parabolic, due to the ever falling interest level. Hence, an investor could now only know for certain to get half his principal back when the bond matures in 2117 I think it was. As many commentators laconicly commented – off course you would also be dead by then, so who cares!
Add to that, that the entire German government bond curve had now gone negative. That is all the way out to 30 year maturities.
As if the above is not frightening enough, then apparently now we have apparently surpassed 15 trillion USD (trillion that was) of negatively yielding bonds worldwide. That is so many zero’es I can even begin to print them out here.
Lastly a story from my little corner of the world last week, the first real estate mortgage customer got money back from his mortgage. That was even after mortgage contribution which is usually around 0.6-0.8%.
So where does all this leave us. – well obviously money are now free, and we seem to be just an inch away from the concept of central bank helicopter money.
Yet, despite all of these happenings, whether they be the source of misguided central bank monetary planning aka manipulation, or the result of some larger global-wide demographic development resulting in more extreme japanification then ever hit Japan, real economic activity and inflation levels are not really rising much.
So what can we derive of all these developments. Well first obvious conclusion seems to be that the capitalistic animal spirit of homo economics has indeed passed away. – will someone please put up his grave stone.
Question remains – who killed him?
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