Anyone who buys a 5-year note yielding 1.5% is f*cking insane. I don’t care what currency it’s in. If you want to diversify your currency holdings (or bet on a currency, for that matter) then just buy the currency; there’s no need to commit to 5 years at a paltry 1.5%. I would put money in a bank at 0% or under my mattress before I’d commit to a 5-year note at 1.5%. If rates uptick just a little that bond will get whacked – do the math. And if you’re holding it until maturity, well… you’re just getting 1.5% per year. So, the Nips are crazy. What else is new?
Of course we’ve got our share of crazies too… we’ve got people willing to hold 10-year notes yielding 5.5% or thereabouts, which is barely above inflation. Meanwhile, you can get a CD that yields almost the same rate with almost zero duration risk. Go figure.
The world’s gone mad. But at least it’s entertaining.
