Financial Collapse – Negative Interest Rates -REPO Disaster Then Bond Market Failure!

The pivot to Value stocks and Bonds in August should have been expected.

How can EU institutional investors chase negative yields when US Treasuries are paying up to 2% more?

So, it looks like much of Augusts’ deep inversion could have been more to do with safe haven and the escape from negative returns!

Anyway, the value stock and bond rotation has put extra strain on dollar funding in the system. There is a massive shortage of USD and the REPO rate hitting 10% shows that some overnight borrowers will pay a high premium for funding and/or else there is a major problem with an ‘Institution’ – bn of overnight funding is not a small amount of funding.

The cracks in the Bond market could be widening. Prepare for a possible exit panic!
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20 thoughts on “Financial Collapse – Negative Interest Rates -REPO Disaster Then Bond Market Failure!”

  1. Wonder why he never talks about uk, but only talks negative about rest of the world.
    He must be god for knowing all these things.

  2. Basically most of europe & the US were broke during the GFC. Since the GFC debt has sky rocketed. The US & Europe are definately broke now.

    The system will break down & chaos will occur

  3. Fab content. When this hits is it going to be huge liquidity crisis? ie should I hold on to cash ! And precious metals ??

  4. Massive inflation 40 years ago doesn't even register the hyper inflation NOT being experienced now!
    Who could have thought zero inflation after a dozen years of haphazard money printing would be easily convincing until I have to buy actual toilet paper?

  5. The USD shortage is not a problem for the rest of the world it is the FED problem – IF they want to remain the reserve currency AND the banker of the world, which they do. The only way is negative yields across the world so unsure why you wouldn’t buy Bonds for capital return, but you’re right in saying no one wants to hold till maturity.

    There simply is no other way out of negative yields because of the tonne of debt how can you increase 17 trillion of negative yields AND with it economies are still facing recession- imagine what it would be like if this $17 T is refinanced at positive yields.

    Buy bonds, buy equities, buy gold and buy real estate..buy them until the USD dies.

  6. The life of Jools

    Time for another video ? Please ?? 🙂 repo market is chaos…..Warren has publicly demanded answers from the Fed…. JP Morgan are squealing about legal reserve requirements… what's going on ??? All the best ……J

  7. You have to wonder, invest in 100 year bond, small negative rate, why?
    Well what happens when the Euro collapses? If its then denominated in the new Deutsche mark you may well make a massive profit.
    The second argument, what happens if you are FORCED to invest in these bonds. Think banks and insurance companies.
    Next, as you say, its the buy the bond, flog to the ECB, for a turn. This is just illegal state funding by the back door.

  8. Just looked at houses for sale in my local estate agents couldn't believe the price of a basic terrace in a deprived area of manchester, 185 k

  9. The FED has just announced it is extending the RIPO bailout through til 12 November. That's on top of all the other's they have planned and have carried out. So, bailout or collapse (and perhaps change?)

  10. Sajid Javid this week said the government could borrow money at negative rates in real terms for 30 years. It has been clear for some time the assholes who got us up this creek have no idea how to get us out of it.

  11. It's weird how those of us that were around in 2008 and the so called crash/recession really wasn't anything like a proper crash/recession. Things went a bit downwards for a bit i never saw 30% of the populace on street corners and shelves empty of goods as in 1929 from the documentaries i've seen.

  12. Some give me a quick summary (breakdown) of content video please. Also how will negative interest rates affect the ROI and overall value of government bonds (securities) and how will it effect value (price/ demand) of the dollar? Are we going to see a dumping US bonds and dollar (currency)? Thanks

  13. The West went from a manufacturing economy to a consumer economy funded by borrowed money. It never was a good idea in the long term but in the short term in made businesses rich.

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