Submitted by Taps Coogan on the 7th of August 2019 to The Sounding Line.

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CNBC’s Rick Santelli recently spoke with Bianco Research President Jim Bianco about currency wars and negative interest rates. Both note that the lose-lose nature of currency wars is driving massive increases in negative yielding bonds, which now represent a staggering 44% off all developed market bonds outside of the US.

Some excerpts from Rick Santelli and Jim Bianco:

Bianco:

“If this is not a currency war, I don’t know what the definition of one is and the problem with a currency war is that everybody loses. It’s one side will lose worse than the other, but no one will come out ahead.”

Santelli:

“…I don’t argue that it’s a currency war if you look at intentions, but I think that the whole ‘manipulator’ issue is a little bit fuzzy. Because in my opinion, they’ve been manipulating the Yuan/Renminbi for a while to hold it in place. Now they’ve decided they don’t want to manipulate it that way, and we are not pleased that they are manipulating it in a different way… So, it really is kind of semantics…”

“Every time you have one of these episodes, what happens with negative rates?”

Bianco:

“We get more of them… There is (a record) $15 trillion in negative interest rates and it’s 44% of non-US bonds of the developed world”

Santelli:

“…Every time something bad happens and we don’t really fix it, it ends up stockpiling more in negative debt.”

Bianco:

“Negative rates are coming about because of QE. There’s been $12 of world QE… It’s a storage fee…”

Santelli:

“Which country didn’t do QE?”

Bianco:

“Australia… and their banks are at all time highs, or recently were at all time highs.”

There is a bit more to the interview, so enjoy it above.

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