The speed of negative interest rate growth is accelerating at an alarming rate…
The Financial Times reports the value of global debt trading at negative interest rates surged another $300 billion over the last week. Today, $13.4 trillion in global bonds now offer negative yields.
We cover gargantuan debt numbers so often in these pages, it’s easy to lose perspective. Here’s what $300 billion equates to…
261 Dallas Cowboys stadiums. The state-of-the-art retractable-roof stadium can seat 80,000 people. You could build five in every American capital city and still have money to spare.
29 Ford-class, 110,000-ton nuclear aircraft carriers. (That’s almost three times the number the U.S. Navy has now commissioned.)
200 identical replicas of the 163-floor Burj Khalifa, the tallest building in the world.
50 “Hyperloops” (a high-speed ground transportation concept that would allow folks to travel from Los Angeles to San Francisco in 30 minutes).
375 Hoover Dams, each capable of holding back 1.24 trillion cubic feet of water.
Keep in mind, that’s the equivalent amount of negative-yield debt created in one week. We’re sure this won’t end badly…
Longtime Daily readers know there’s only one asset most investors should turn to for safety in such a precarious financial environment: gold.
There’s a reason it’s our favorite “chaos hedge”… It’s the only monetary asset that cannot be conjured out of thin air. And there’s been trillions conjuring over the past eight years…
We believe gold has an important defensive role in every investor’s portfolio. It should comprise 3-5% of your net worth. But with the advent of negative interest rates, gold has acquired a bullish tailwind never before seen in its 5,000-year history.
Gold pays no yield. But compared to negative yields (by which you pay others to lend them your money or pay them to hold your cash in a bank), gold is now a net gain for the owner.
That’s sent gold’s price surging in 2016. It’s now up 26.44% on the year. But several assets leveraged to the price of gold (like gold-mining shares) have tripled… and they’re just warming up.
In our next item, The Palm Beach Letter’s Teeka Tiwari explains exactly how this levered play on gold works…