“Bond guru”, Bill Gross (the name kills me. “Gross?”) says the world’s financial system is in deep shit with negative yields on bonds. Dire consequences for who? The extremely wealthy? The description here is amusing: “$10 trillion ‘supernova.'” Japanese bonds have hit historical low levels with Bill Gross saying this is the lowest bonds have been since the 16th century. The financial pundits are so off as usual. America’s CNBC wrote in their article Why JGB yields won’t keep falling deeper into negative yield reported that Japanese bonds wouldn’t fall any further with the Bank of Japan purchasing bonds, and now Bill Gross is reporting the bond market including Japan’s bonds have reached historical lows.
In this essay The Present Crisis, A Pattern?, some interesting tidbits of information are offered suggesting this present “civilization” is coming to an end and a new civilization is about to replace it. When the Japanese moved to negative interest rates that’s when they yanked the bottom out from underneath Japanese government bonds and the entire bond market. Then this report from CNBC asking if American bonds are about to go negative. The bonds at historical lows are really gross.
Source: Yahoo Finance
Bill Gross: Negative yields are a $10 trillion ‘supernova’ that will ‘explode’
By Jeff Cox
June 10, 2016
Bill Gross: Yields lowest in 500 years; $10 trillion
Bond guru Bill Gross believes the growing global move toward negative yields will have dire consequences.
In a tweet from his firm, Janus Capital, Gross goes back half a millennium to assert that the current situation with the world’s debt market is unprecedented and dangerous:
The warning comes as yields on Japanese government bonds and German bunds (Germany: DE10Y-DE) hit record lows.
While it’s unclear what database Gross used to track bond yields back to the 16th century, there has been some academic research done on the topic. Bryan Taylor, chief economist for Global Financial Data, has done work on the subject and found generally that yields have declined over time.
In recent days, private banks have revolted over the growth of negative yields in Europe and Asia, a trend that has helped push big money inflows to U.S. corporate and government debt.
Gross runs the $1.4 billion Janus Global Unconstrained Bond Fund, which has returned 3.3 percent year to date