I would think its the Fed keeping the markets orderly. Or is there some special safety in buying negative yield? http://www.nytimes.com/2010/10/26/business/26bond.html Inflation Bonds Are Sold With Negative Yield for First Time By CHRISTINE HAUSER Published: October 25, 2010 At a time when savers complain that they are earning almost no interest from their bank accounts, some investors on Monday bought United States government bonds that effectively had negative rate of return. Bizarre as it sounds, that is correct. In an auction of a special kind of five-year Treasury bond, investors paid $105.50 for every $100 of bonds the government sold â agreeing to pay the government for the privilege of lending it money.
That's negative real yield. TIPS principal accrue at the level of headline CPI. So, if inflation picks up, the nominal yield can be very positive.
It has almost all to do with the G20 meeting. Central banks of the G20 are adjusting to their agreements.
Negative real yield means current economic slump and future inflation. How could it possibly signal future stagflation? does a high fed funds rate imply future expansion?
There are pools of capital. Markets provide access to the pools. The market offers through a mechanism. Capital must be used as "the price of admissiion" to participate. Fast forward to selecting the "use of capital" to participate. The shorthand representation for poor choices and poor understandings is.... "LOL" No one need bet on the future. Taking the market's offer is done continually in the Present and the Present only.