Bitcoin and the Dawn of the Negative Interest Rate Era
” On the morning of Monday, September 15, 2008, at 6:55 a.m., I arrived at my turret on the trading floor of a Manhattan-based hedge fund and flipped on my Bloomberg terminal. As the head of trading, I was in the habit of looking at sovereign debt markets before checking our positions from the previous trading day. But on this morning, reviewing world bond markets took on a particular urgency. Lehman Brothers was filing for bankruptcy and the entire world was in the throes of the worst financial crisis in 75 years.
What I saw was that, all over the world, short-term debt markets — “bills,” in industry parlance — showed negative yields. In virtually every industrial nation, firms and individuals were seeking the safety of the printing press, effectively handing $100 to governments for the assurance of receiving $98 in four weeks.
This was, of course, a brief moment in time within a highly liquid and mostly unhindered financial market. Rather quickly, the classic shape of the yield curve returned. ”