End of an Era
Imagine you found a magical bank that lets you borrow money at 0 percent interest. Naturally, you’d take that free money and put it into a high-yield savings account or the stock market to pocket the difference, right?
That, in a nutshell, is the Yen Carry Trade. For over a decade, Japan’s interest rates were stuck near zero – or even negative. Investors, from massive hedge funds to Mrs. Watanabe (the stereotypical Japanese retail trader), borrowed trillions of yen for next to nothing, swapped them for U.S. dollars, and bought higher-yield assets like U.S. Treasuries or even high-flying tech stocks.
It was the ultimate infinite…
Read the full article at ACTIVISTPOST.COM
