Borrowing Cost

Posted: November 17, 2015 in Money Matters
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“On Tuesday, the Italian government sold a 2-year note yielding MINUS 0.023%.  We don’t know what is more preposterous: that the Italians were able to borrow money at a negative nominal interest rate or that the press reported this transaction with a straight face….  But as long as rates remain below zero (and they could go lower!) money is not just free… it’s a cost not to borrow!…  Imagine you are buying a house…if a mortgage carries negative interest, it implies that the house (an equal capital value) also has negative value.” -Bill Bonner

Interesting times we are living in….

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