by John Rubino
Negative interest rates are an existential threat for insurance companies, pension funds and other financial entities that need positive investment returns to survive.
As rates on government bonds have gone negative in Europe and Japan, the above companies have been big buyers of US Treasury bonds, which still (for some reason) continue to offer positive yields.
But according to a Bloomberg analysis published today, Treasuries’ positive yield has recently evaporated when the cost of hedging currency fluctuations is included. Here’s an excerpt: