Negative yield gilts

[ursaminortaur]

The UK has sold three year gilts at a negative yield so that buyers are now paying for the privilege of lending to the UK government.


https://www.ft.com/content/3d576f71-6833-4a55-8b8c-f4abfb0ca172

UK sells negative-yielding government bonds for first time
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The UK sold £3.8bn of three-year gilts at a yield of minus 0.003 per cent, according to the Debt Management Office. The slightly negative yield suggests investors who hold the debt to maturity will get back less than they paid, when accounting for regular interest payments and the return of principal.

The UK sold a one-month bill at a negative yield in 2016, but this represents the first time it has sold a conventional longer term bond at yield below zero.

[odysseus2000]

Snorvey

What about countries that don not have their own central bank?

What about investors who don't have their own money printing press?

Regards,

[dealtn]

Snorvey

What about countries that don not have their own central bank?

What about investors who don't have their own money printing press?

Regards,

That's nearly every investor, what about them? I'm confused what your point is.

[odysseus2000]

Snorvey

What about countries that don not have their own central bank?

What about investors who don't have their own money printing press?

Regards,

That's nearly every investor, what about them? I'm confused what your point is.

It was an attempt at humour, clearly didn't work!

Regards,

[1nvest]

Shorter dated gilts were yielding -12.5% in 1974, after discounting tax and inflation. When interest rates hit/approach zero so interest rate policy is no longer viable and alternatives such as QE have to be employed instead. Nothing any more unusual than in the past as/when interest rates were lowered.

UK plc has around $8 Trillion of foreign holders of UK debt, whilst the UK holds around $750Bn less than that in foreign debt; But where the interest paid out on the 8T is less than the income received from foreign holdings such that the current account near balances. Variations in yearly amounts are somewhat irrelevant - its the longer term average that matters, and that the Central Bank strives to navigate. Much of the UK economy is services - consumption, and the demand whilst lowered by CV-19 will resume relatively quickly after lockdown ends and consumers are able to spend more freely again.

Yes money will sooner or later move over to being electronic as the State wants to be able to trace all money flows and hence maximise tax revenues. People accepting that however is just another nail in their loss of freedom coffin - as per street surveillance etc. that just turns the country into a open prison. When the state knows exactly how much you have, and where it is, its no longer your money but is instead just a loan, open to being confiscated at any time.

[JohnW]

[i].... the government is having no trouble borrowing. That was evident in the $190 billion — $190 BILLION! — of Treasury bills and notes the government sold on Monday.

Peanuts. One man could have bought 95% of those bonds himself if he hadn't had an expensive divorce recently.
https://www.businessinsider.com.au/jeff ... ?r=US&IR=T