Another perspective:
Right now 5 year Swiss Gov Bonds are yielding -.5% i.e. You buy this bond and you are effectively paying the Swiss government $5000 for every $1m every year for the next 5 years for the guarantee that you get your money back in in the same currency and full.
http://www.investing.com/rates-bonds/switzerland-government-bonds?maturity_from=10&maturity_to=290
German bonds also offer negative yields out 5 years.. but you don't have to pay them as much (i.e. they are not as much of a safe haven)
http://www.investing.com/rates-bonds/germany-government-bonds?maturity_from=10&maturity_to=290
Where it gets interesting is Greek yields
http://www.investing.com/rates-bonds/greece-government-bonds?maturity_from=10&maturity_to=290
For 6 months you get +2.74% however if you want to lend your money to the Greek government for 3 years, you will get over 10% (and just under 10% for 5 years)
Or equivalently you will get your 10% per year for three years, but it will be in a different currency (lets for arguments sake call it the Drachma) worth 33% (+10% compounded for three years) less than the Euro.
Seems a Greek Exit is getting closer, add to this the fact that another QE is about to kick off in Europe, and you can see why the Europeans are keen to get their money out of Euros, or at least out of the (nearly) bankrupt part of the eurozone.
Right now 5 year Swiss Gov Bonds are yielding -.5% i.e. You buy this bond and you are effectively paying the Swiss government $5000 for every $1m every year for the next 5 years for the guarantee that you get your money back in in the same currency and full.
http://www.investing.com/rates-bonds/switzerland-government-bonds?maturity_from=10&maturity_to=290
German bonds also offer negative yields out 5 years.. but you don't have to pay them as much (i.e. they are not as much of a safe haven)
http://www.investing.com/rates-bonds/germany-government-bonds?maturity_from=10&maturity_to=290
Where it gets interesting is Greek yields
http://www.investing.com/rates-bonds/greece-government-bonds?maturity_from=10&maturity_to=290
For 6 months you get +2.74% however if you want to lend your money to the Greek government for 3 years, you will get over 10% (and just under 10% for 5 years)
Or equivalently you will get your 10% per year for three years, but it will be in a different currency (lets for arguments sake call it the Drachma) worth 33% (+10% compounded for three years) less than the Euro.
Seems a Greek Exit is getting closer, add to this the fact that another QE is about to kick off in Europe, and you can see why the Europeans are keen to get their money out of Euros, or at least out of the (nearly) bankrupt part of the eurozone.
