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:
“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.”
“…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?”
“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”
“…Every time something bad happens and we don’t really fix it, it ends up stockpiling more in negative debt.”
“Negative rates are coming about because of QE. There’s been $12 of world QE… It’s a storage fee…”
“Which country didn’t do QE?”
“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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