Moneymoney

Sun Aug 4, 2019, 10:09 AM

the mechanics of negative interest rates

I explain to mrs_horseman the mechanics of negative interest rates. < that's the original title by the author.

A bond is simply a loan agreement between a borrower and one or more lenders. It has an initial loan amount called the par value, an annual payment amount called the coupon, and a date called maturity, when the loan is to be paid back in full. To keep the math simple, let us use the following for our illustration:

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For anyone interested in how bonds and negative interest rates work. It's well done (IMHO)

https://www.zerohedge.com/news/2019-08-02/i-explain-mrshorseman-mechanics-negative-interest-rates

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Reply the mechanics of negative interest rates (Original post)
uncledad Aug 4 OP
def_con5 Aug 4 #1
uncledad Aug 4 #2

Response to uncledad (Original post)

Sun Aug 4, 2019, 12:00 PM

1. He's right of course

But you either understand how bonds work, or you don't. I suspect most people aren't interested. I liked the article, but too much math for most folks me thinks. Math is hard.

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Response to def_con5 (Reply #1)

Sun Aug 4, 2019, 01:30 PM

2. Math is hard.

Thank the gods for the Internets...and being lucky enough for friends who can do the math.

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