Nosebleed Prices Making This “Safe Asset” a Gamble

14.07.2016 • Investing

From Inner Circle (United States)-

Something strange is happening…

And if you’re like most investors, it’s not just happening “out there.” It directly impacts your 401(k) or broker account.

Yields in the $44 trillion sovereign bond market have taken out their Great Depression lows. 

For example, the average yield on Bank of America’s World Sovereign Bond Index [see chart above] – a good gauge of the global market for sovereign bonds – has plunged below 1%.

And yields on $12 trillion of sovereign bonds have fallen into negative territory. That’s about $2 trillion more worth of bonds trading on negative yields than at the start of June.

And Germany has issued its first bond with a negative yield. Just yesterday, the German government sold more than €4 billion ($4.4 billion) of bonds with a yield of MINUS 0.05%.

It’s the first time in history buyers have accepted a negative yield on the first issue of a bond. (See Bond Basics box below.)

What this means… and what happens next… are probably the most important questions for investors to ask right now.

And this week, we hope to at least begin to answer them with the help of Bill’s “brain trust.”

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