Friday, June 3, 2016
Questions re: $10 trillion in negative-yielding debt
FT - negative-yielding debt surpasses $10 trillion for first time in history.
Sounds like there's at least $10 trillion more in savings than the world needs for investment, no?
How much of that $10T, by the way, is corporate money stashed away in tax havens like Luxembourg or the Channel Islands?
And how much of that $10T is the savings of the worldwide kleptocratic elite, smuggled out of their countries and held in secret bank accounts?
How much added future productivity growth would $10 trillion buy with increased physical capital (roads, rails, ports, communication systems, water, sewer) and human capital (via education) if only governments weren't fixated on generating a deflationary spiral to enrich the rentiers at the expense of the working class, despite this incredibly loud signal that the market demands more high-quality government debt?
How much consumption spending would $10T buy if only the working class had enough power to bargain for a better share of profits?
And most importantly:
Why is it that the Federal Reserve, the US Treasury, IMF, OECD and G-20 have never bothered to determine what is the optimum amount of world savings necessary to produce positive rates, and then implement economic management policies to produce the optimum?
I mean, we learned S=I and the market for loanable funds in 2nd year macro; it's not fucking rocket surgery or anything.