‘There is no barrier for U.S. Treasury yields going below zero. Zero has no meaning, beside being a certain level.’ Alan Greenspan.
Current estimates hold that some $15 trillion in debt bears a negative yield, which means that investors get back less than their original investments for the privilege and perceived safety of owning government-backed debt.
All maturities of German government debt are yielding negative, headlined by near-record lows for 10-year German bonds, which yield minus 0.605%.
Greenspan said he agreed with one theory espoused by Fels, which says that investors are more willing to hold on to negative-yielding debt because they have much longer time horizons.
“Why people continue to buy long-term Treasuries at such low yields may be also due to forces having altered people’s time preferences,” Greenspan told Bloomberg. “But there is hundreds of years of history showing the long-term stability in time preference, so these changes won’t be forever.”
MarketWatch, Mark DeCambre, 2019-08-13, “Ex-Fed Boss Greenspan says ‘there is no barrier’ to Treasury yields falling below zero”.