We’re headed to $100 trillion in negative rate sovereign bonds (up from current $13 trillion). This means governments are defaulting on $100 trillion in debt. For the glitterati, Illuminati, and digerati, this is the crisis they’ll never see coming and will never understand.
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FYI paying negative interest rates is not default. The investor contractually agrees to it.
So you are claiming that pension beneficiaries knowingly agreed that the funds they are relying on should pay rather than receive interest?
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Negative rate sovereign bonds are typically extremely low risk (e.g. Switzerland). They reduce risk in the overall portfolio, which also includes high risk and return assets. Net, the pension portfolio still delivers positive returns.
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Anyways, portfolio holdings aren’t a secret - pension beneficiaries can always scrutinize them :)
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Some other things also create risk. For example, changing things that people saving for their pensions didn't in their wildest dreams expect to be changed.
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P.S. while we're at it let's load up pension funds with these sovereign bonds which were also probably called "extremely low risk" or "risk-free" when they were soldpic.twitter.com/0AXPRoskYG
End of conversation
New conversation -
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Knowingly and contractually are often 2 very different things. Especially for those that have been told "Generally, things go up and you'll be paid interest/returns/more". Or even when those clients/customers questioned the "Past results are not indicative of future results."
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