Modern finance has seen many innovations in the last 20 years. The Black-Scholes-Merton theory promised risk-free investment if it was properly hedged, or insured through market based options. That spawned a whole new category of investment in derivatives, or re-selling of insurance that nearly anything might go wrong. There were always new places to put money through the last generation as new concepts of “investment” were created. But through it all, there was one constant: there is a time value to money, which is to say that money today is paid for tomorrow plus a little bit more – call it “interest”.
No longer. Debt from large, secure nations is being sold at net negative interest rates, meaning that those with money are actually paying to lend it. Money today is worth less than money in the future. The implications of this are staggering.