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NIRP In One Picture: €400 Billion In European Government Debt Currently Has Negative Yields
From Bank of America:
"The chart shows that around €400bn of Eurozone government debt and bills in our bond indices currently have negative yields.... In the topsy-turvy world of negative rates in Europe, it will seem as if credit is becoming the new government debt in places."
This number is only set to grow as Europe discovers it is Japan.
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Bankrupt bitchez
ooh la la! how can i get me some of that action?
yes. if you are an european sovereign that is working in a believable way towards balanced budgets... in this crazy currency environment you'll find yourself being paid in order to get in debt
on the other side... you can't get more debt. because you have to balance your bugdet (or credibly going towards this target)
a classic case, as when "the banks lend you an umbrella when it's sunny and want it back when it rains"
in a similar way, if you have one million at a megabank, they ask you for fees, but if you want a million from the bank, they'll give it to you for nearly free (compared to someone that hasn't a million)
So, in other words a major FAIL.
because...? I could say that the Eurodollar is a major fail, but all those USDs sloshing around Europe are now nearly a fixture. seriously, where is the FAIL?
What part of all fiat will go to zero don't you understand?
I like the concept of balanced budgets, but such things require that things are properly valued, and that requires true price discovery.
and what part of: "it never happened in history of all fiat going to zero at the same time" did you not understand?
no. the very current and real and existing production of goods that clothe, feed and shelter whole population is a proof that it's not value and price discovery that is utterly critical
it's price calculation. your point is post-production. after value has been produced, and you start to worry about how to keep that value
there is no "true price discovery" as long as we are sloshing in fiat!!!
"Where is the FAIL ?"
Every Road now Leads to Economic, Political and Social Upheaval, which will be visited upon the Highest and the Lowest....
....and we can only hope that confluence doesn't lead to War, which given Human Nature is indeed as likely as anything....
=
"Major Fail"....
As to which Currencies will Fail and which will remain, their Values and Utility, that is a another matter altogether....
Soverign bonds yields may be artificially depressed by Draghi's magic talking. Then what? If anyone, big-time investors should call the bluff. But they just don't, so one may wonder what's happening... Let me tell you: central banks are just buying time for banks to clean up their balance books and for governments to implement thosee goddamn reforms that were due since at least a few decades. No further integration is coming if half of the continent is working its ass off and the rest of the continent won't sew the holes in their pockets.
Investors know it and prefer to receive little or no interest rather than another decade-long financial crisis (i.e. Euro periphery falls bringing down the whole continent with it and subsequently the whole world) or a global conflict (with the US having a fake printed recovery, Japan about to implode and China's credit bubble, a war may as well be an inevitable "Reset" button).
"the banks lend you an umbrella when it's sunny and want it back when it rains"
One of My Favorites.....
So, now getting to ZIRP will be a major accomplishment.
That would be "raising rates"... too dangerous...
for the banks, yes. NIRP is something only banks pay. for a checking account at the ECB, in this case
Not true. There are banks in Europe, which charge negative interesat rates to their customers for deposits.
with real inflation rates, all government debt yields a negative rate.
Yeah. I got a riase. damnit, my cost of living just exceeded the raise. Hmmm. what to cut now.
...your taxes?
No worries, Negatve + Negative = POSITIVE
X
maybe per U.S. math. In the rest of the world is negative + negative = negative.
That is precisely what I would call deflation.
But that's just my opinion...
We purple NIRP'd some folks....
Negative Yields, as in the goverment gets paid to spend money.......
Europe might as well rollover all the current debt and pile on everything they will need for the next 500 years if the yields are negative. What could possibly go wrong with such flawless central planning logic?
Awesome, when will the bank pay me to take out a billion dollar loan?
"winning"
You need to get a grip on the new equality.
I've a priceless sculpture, an original Q99X2 connectable, for 80,000 that I'd be willing to part with if there are any bankers in need of collateral. I've appraised it myself.. Don't pass up the chance of a lifetime before you jump M'Fers.
Look, Goldman Sachs is going to print taxpayer dollars to bail out the Bush family. An economist who correctly predicted the fall in oil price this year has told CNBC that the U.S. government could look to bail out its energy sector.
So, is Krugman moonlighting for Europe as well?
Krugman hates the guts of the EUR, and he hates the eurozone's goal of balanced budgets
WHAT?
What ever it takes.
What difference does it make.
What you don't know can't hurt you.
What you gonna do when the come for you?
Are these the bonds we expect Draghi to buy?
To quote Hillary: "what does it matter?". When the purpose of money creation is political policy, theft and fraud, then one method of funding crooked government and their crooked politicians is as good as the next.
The banks funding the governments can pay governments to take their money of they want to continue to control them.
Word is Hillary is about to corner the cattle market.......again.
Surprisingly candid comments from Bank of America:
Article by Ambrose Evans-Pritchard
09 Dec 2014
http://www.telegraph.co.uk/finance/oilprices/11283875/Bank-of-America-se...
excerpt:
Bank of America said quantitative easing in Europe and Japan will cover just 35pc of the global stimulus lost as the Fed pulls back, creating a treacherous hiatus for markets. It warned that the full effect of Fed tapering had yet to be felt. From now on the markets cannot expect to be rescued every time there is a squall. “The threshold for the Fed to return to QE will be high. This is why we believe we are entering a phase in which bad news will be bad news and volatility will likely rise,” it said.
What is clear is that the world has become addicted to central bank stimulus. Bank of America said 56pc of global GDP is currently supported by zero interest rates, and so are 83pc of the free-floating equities on global bourses. Half of all government bonds in the world yield less that 1pc. Roughly 1.4bn people are experiencing negative rates in one form or another.
Paging The Vapors....