Interest rates are negative and a similar dynamic is driving Google and Facebook’s fight for media content

On December 10, it finally happened. Instead of demanding an interest payment from the Government in return for lending it money, a group of investors offered to pay the Government in order to lend it money.

Naturally enough, the offer was accepted.

The Government needed $1.5 billion, which it promised to repay on March 26.

It sought tenders. What was the lowest return an investor would accept to lend it the money?

It wasn’t short of offers. It fended off $8.2 billion of bids, and some of them were prepared to accept very low returns indeed.

The lowest was -0.01 per cent. The minus sign indicates that, instead of the Government paying the lender a return for lending to it, the lender would pay the Government a return for the privilege of…