Negative Interest Rates

As we have previously mentioned, worldwide negative yielding debt is at an extraordinary level. In fact, there is $15 trillion of negative yield debt outstanding. While negative yields have generally been relatively short-term, the entire German government bond yield curve is now negative. And while negative yielding government debt has occurred for the last several years, it hasn't reached the consumer market until now. Denmark's Jyske Bank recently announced that home buyers can now take out a 10-year mortgage with an interest rate of -.5 percent. This means that ignoring fees, home buyers will pay less for the house than the purchase price.