Bank of England Pivots First, Fed to Follow – Ep 844
The Peter Schiff Show Podcast
00:00
The Problem With Low Interest Rates on Bonds
In order to maintain any kind of yield, they borrow money. They take on tremendous risk. That's why so many of these bond funds are falling so much because they are levered. The buyers of these products had no idea how much risk the underlying funds were taking. Something is safe, but not if you levered up. So there's all sorts of malinvestments and risk taking. In fact, one way a lot of people dealt with low yields on bonds is they bought more stocks. Not only don't you get any return, you actually lose money.
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