So why are there still buyers for bonds with negative rates?

Following my earlier rant on Negative Interest Rates by Central Banks, it is perhaps worth mentioning that many Government  and Corporate Bond rates are also negative these days.

This means that effectively if you lend to these governments or companies, at the end of the term after a few years, you will have to pay them for the privilege of lending them the money (instead of  earning any interest). This sounds really silly, so why are those bonds selling so well? There are perhaps two sane explanations.. or are they?

- People may buy government bonds with negative interest rates in the hope that the currency the bonds are denominated in will appreciate substantially in value, thus still make a good return for investors.

- People may buy bonds with negative interest rates as long as they can find buyers later on that are willing to pay even more for it.

When a good number of people are making investment decisions not based on the value of the underlying assets but instead on the speculation that there will always be someone that will pay more for it, cunning investors should take these as early warning signs of trouble.