The Draghi Derangement: $2 Trillion Euro Government Bonds Trading At Negative Yield !

• Would you pay the government to use your money? Would you pay the bank to give them the privilege of using your money? This is what negative interest rates mean! It is a sign that the financial system is breaking down! If I go to a bank and borrow US$1 million and the bank pays me money every month for lending me the money: why would I want to work any more? I mean working to earn a living, of course. I should just go and borrow money and keep owing money. Since I am paid to do so! It is insane!
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• The Draghi Derangement: $2 Trillion Euro Government Bonds Trading At Negative Yield! 
  by David Stockman, http://davidstockmanscontracorner.com/ 
  That investors anywhere in this age of fiscal profligacy would pay to own the notes and bonds of sovereign states is a testament to the financial deformations of modern central banking. But the fact that nearly $2 trillion of debt issued by European governments is currently trading at negative yields——now that’s a flat-out derangement.  After all, the aging, sclerotic economies of the EU have been making a bee line toward fiscal insolvency for most of the last decade.
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  So it goes without saying that this giant agglomeration of pay-to-own government debt is not reflective of an outbreak of fiscal rectitude or any other rational economic development. It’s purely an artificial trading result stemming from central bank destruction of every semblance of honest price discovery. In this case, the impending ECB purchase of $70 billion of government debt and other securities per month for the next two years has transformed the financial casinos of Europe and elsewhere into a front runner’s paradise.
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  As today’s Bloomberg piece tracking Europe’s $2 trillion of exuberant irrationality makes clear, sovereign bond prices are soaring because traders are accumulating, not selling, in anticipation of the ECB’s big fat bid hitting the market in the weeks ahead:
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  read more!

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