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Presenting The Buyers Of More Than 100% Of New German And Japanese Bond Issuance
Back in December, when the total amount of annual ECB Q€ was still up in the air and and consensus expected a lowly €500 billion annual monetization number, we calculated that based on Germany's capital key contribution of about 26%, the ECB would monetize some €130 billion of German gross Bund issuance, or about 90% of the total scheduled issuance for 2015. Subsequently, the ECB announced that the actual amount across all ECB asset purchasing programs, will be some 44% higher, or €720 billion per year (€60 billion per month).
So what does that mean for the revised bond supply and demand across two of the most important developed markets?
Well, we already know that the Bank of Japan will monetize 100% or just over of all Japanese gross sovereign bond issuance (source).
As for Germany, on a run-rate basis, and assuming allocation based on the abovementioned capital key, it means that for the next 12 month period, assuming no major funding changes in Germany, the ECB will swallow more than a whopping 140% of gross German issuance!
Or, said otherwise, the entities who will buy more than all gross German and Japanese issuance for the next 12 months, are the ECB and the Bank of Japan, respectively.
This also means that to fulfill its monthly purchase mandate, the ECB will have to push the price to truly unprecedented levels (such as the -0.20% yield across the curve discussed previously, or even lower) to find willing sellers.
That said, please don't tell your average Hinz and Kunz that more than all German bond issuance in 2015 will be monetized. It will bring back some very unpleasant memories.
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I better get better Autobahns, or rebuilding the Karl Marx Forum, or an aircraft carrier or two out of this deal.
10 years going negative within 6 months.
Interesting posts on debt:
http://www.debtcrash.report/entry/debt-taken-on-by-fools
http://www.debtcrash.report/entry/i-bought-what
Sometimes I wonder if the fascists just maybe, maybe, didn't win WWII?
(yes, I know they financed both sides)
The labels are misleading.. but to think that the cabal, the owners of debt will then own all of Germany's debt again is disheartening.
Once the transactions have been completed, the cabal will bleed Germany dry just as they have before. Rates will go up sharply as well because Germany can afford to collect higher taxes and pay way higher interest rates on government debt.
That seems to have been the purpose of the Euro and the ECB all along. Establishing the Trojan Horse of intereuropean debt swaps, crashing the perimeter economies and forcing Germany to absorb the risk and sign off on bailouts.
Now Germany is in Shylock's grip as they have swallowed the dependency of the EU and the Euro hook, line and sinker.
Greece was a trap, set by Goldman (lead shark of the cabal).
As always, Germany's innovation and Germany's industrial production are the prize.
I will do everything in my power to remind my kids and their kids that it was an unholy alliance of corrupt politicians and American banksters who entrapped Germany and ruined the nation's future.
The "fascists" definitely lost WWII. The "communists" definitely lost the cold war. TPTB won both. TPTB are TPTB. They will hide behind any guise that furthers their cause for the moment and then move on to the next once the guise has lost its utility. Rinse and repeat. Real fascists and communists are vile mindless thugs who espouse systems that simple cannot work over the long haul. Do the math on that an you will see the equation is missing brains. To find the brains just follow the money.
@ House
German 10 year yield 0,3 today. Make that 6 week max.
The Finanzagentur should stop selling anything but 30 years German bonds for less than 1%. Now that would make sense to me.
The farmer who owns the IOUs takes the town and dictate the town's rules, wich is pretty much what's going on in Europe and in some other places....
Just gettin' warmend up!
I wonder if the average German has any more clue what monetary fuckery is being done than the average American? Since ZERO Americans understand (and even fewer care), it's not that high a hurdle to clear.
And don't even get me started on the Japs. Nobody gives a shit what they think. Least of all their own government.
http://www.zerohedge.com/news/2014-06-21/end-fed-rallies-are-exploding-t...
https://www.popularresistance.org/german-protests-against-the-federal-re...
http://libertyblitzkrieg.com/2014/06/19/video-of-the-day-end-the-fed-ral...
http://www.youtube.com/watch?v=lIjYjkJt2us
Yeah sure. You are making that all up. It wasn't on MSNBC/CNN/Fox/XYZ so it must not be true.
Tyler we need video " i need more crazy pills"=)
So their going to swallow the whole load....
Nice!
Balls-n-all.
how do you buy 144% of something?
I think it's sort of like getting a Nobel Peace Prize for not doing anything.
Stock vs flow.
I imagine Germany will issue more to makeup the difference for Free cash. It would likely get wasted on "Renten mit 60" insanity, or in the alternative, the ECB/BuBa will start gobbling up past issuance.
I told my GF's dad that BuBa is buying Bunds in mass. He refused to believe me. If you can find an article destribing this in German -- it would be appreciated.
All I have found are articles talking about how great this is for "Europe" blah blah blah.
It's just "the big lie" in new clothes. Not that it'll make this any more palatable...
Just use an online translator. My Polish ex used to oversee communications I sent to her pops and she said it was right on.
I speak/read/write German pretty well.'
Finding articles about it isn't that difficult. Most of them are either;
1) The BuBa though a process approved by the ECB and sanctioned by the Bundestag acquires Bunds from the government, allowing the Goverment to save money on interest, investing it into our European Partners, Education, Healthcare, Refugees and other worth while causes.
2) Through articel 123 TFEU the Buba through Charter 293 Paragraph 9 section 2 has allowed the indirect acquisition of Government debt in accordance with WU 2007/23,13 and (very technical "Germans being German" language) which is almost incomprehensible to people who aren't BWL'ers.
Has to be "a creditble source" and regrettably, ZH for people who aren't familiar with the website don't see it as credible.
Lastly, Google Translate absolutely murders the German language. Linguee.de is your best friend for finding pre-translated sentence fragment and piecing together your thoughts one clause at a time, although complex compoun sentence without a real German reading over them are worthless. These are sentences that end in a string of verbs. The worst I have seen is 5 verbs back to back (können wollen machen sollen werden). This is when you have a helping verb at the beginning of the sentence, then (in this case) 5 clauses in the same sentence (Germans love long sentences) and then almost a paragraph of text without verbs. Its almost illegible for a native German speaker at this point, and only appears in like the Steuergesetzbuch. None the less, its still correct German.
From the Handelsblatt:
„Wir sind seit dem Vormittag am Markt aktiv“, sagte ein Bundesbank-Sprecher am Montag. Um 9.25 Uhr betrat die Bundesbank den Markt.
Sounds sort of like a Squid reaching out and attaching itself to its prey...
It reminds me of;
"Seit 5:45 Uhr wird jetzt zurückgeschossen!"
how do you buy 144% of something?
It's called a bond bubble.
They mean buying 100% of new issuance plus buying what was already owned by private entities, like Japan's central bank buying JGBs from pension funds.
You buy 100% of the new bonds and 44% of the existing bonds. Or you buy bonds of the KfW for example.
You pay 144 USD for a 100 USD bill!
how do you buy 144% of something?
Just buy moar.
The Fed added almost $4 trilliion, Japan and Europe picking up the torch and running with it. Nasdaq up 50% in 2 years. Not surprising. The surprising part is thinking it ends well.
The surprising part is any of us thinking we will live to see the end.
Ends well depends on perspective. We, we are truly hosed. CBs are buying up grovernments. Corporations are buying up themselves with debt that ultimately goes back to the CBs. In the end, CBs will own everything and everyone. Then, they merge or implement a CB bank of CBs and consolidate under global management.
Fight, flight, or freeze?
Pretty amazing what Central Banks are doing to us.....totally took away any chance of haveing a normal market....this drug will kill the host...we will never kick this habit...
Central banks represent their respective Govts. The Central banks that are printing are doing so because their Govs are going broke.
100% true
Unfortunately Govs will never take responsibility for going bankrupt and the plebs will never lose hope in a Gov. solution. See the new leftist Greece as an example how Govts. will try to solve their debt problems by squeezing the plebs for everything they can.
greece have not any army, so they can't fight back. Europe will make coup or usa nato forces. It's really hard for them...
Greece is too small a global player. The Govs that can however, will take their plebs to war before admitting defeat and having to default and give up control. They'll blame anyone but themselves.
sure, they can, but i don't know how it will end.
Kow, that would be 144% true
You don't think CBs represent themselves? Their actions have been destroying western civilization for more than a century. They act in concert. They never lose even if their country does. They are printing because it helps their governments go broke as a means of transfer of each nations wealth to the CBs.
You people need to stop seeing this as a conspiracy one moment and then attribute this all to stupidity the next.
Central banks represent their respective governments.
Yeah, right.
Negative rates should help countries balance their budgets. CB paying treasury to hold their debt. This is all sunshine and flowers, you doomsters are all stupid. I'm gonna go to lunch with the wife and then get tilling on the garden. Piss on all this financial stuff.
but gold and silver down.....go figure
Mrs. Brock has set the price.
and this would explain why the phony paper prices of Gold and Silver r goin down......?
yeah, uh huh....
I really like that old photo, with young Alan Greenspank at the press and a demure, svelte Janet Yellen gazing at him over her shoulder. Fed-lust from the start.
farfegnugen ...take out that new fiat for a ride !! Inflational !
"We are not printing money".
"We will not monetize the debt".
EU Special Advisor Benjamin Bernankenstein. March 2015.
Bankers Swallow.... Nice
Once they own all the debt surround all the central banks with tanks (if necessary) then cancel it and revoke their charters and start over. Unfortunately I can't see them starting over with real money.
Don't worry, it's just another perpetual motion machine.
The larger problem with money printing, apart from its distortion of the economy, is that it imposes marginally higher costs on the many while delivering enormous outsize rewards to the few.
Of those swallowing the costs, only a tiny percentage come to understand how they were fleeced. They will oppose the Central Banks to the same degree they were fleeced, all things being equal, which is to say MARGINALLY.
Of those swallowing the benefits, they will form a hard core uncompromising base to promote and enable money printing. Not only do they have the advantage in terms of money, but also committment.
Simply, the costs of moneyprinting on the masses are marginal, but the benefits to the elite, existential.
Once the monetary genie is out of the bottle none have managed to put it back short of full societal collapse...and usually not even then.
Plutocide has been successful... But even that is no guarantee, and has the side effect of culling the talent creme from the local gene pool.
Like the zombie apocalypse....you're infected for good.
Well, of course. In a free market only a lunatic whose Russophobia has completely blinded him to reality would lend a dime to any EU satrapy for longer than two years, at any yield. In this reality, the Fourth Reich is headed for war with Russia, a war almost certain to end in the Fourth Reich's liquidation and the repudiation of its debt by whatever replaces it.
In the event, cashing Berlin's shit cheques is Mario's job. The banksters want to cash out and get out before Russian tanks show up in Frankfurt.
Somebody is getting screwed. /"Arsch ficker fuer Deutschland" is the new In. /heavy sarc
Better get that EU Army up and running, before the EU-sheep wake up and "pull an Iceland".
1) I have all CNTRL-P functions - "check", 2) I flood checking accounts with fiat for all bond purchases- "check", and 3) the "logical" conclusion is no inflation ever! - "check". What could possibly go wrong? WTF.
www.traderzoo.mobi
Hmmm... suddenly the PIIGS look like solid citizens.
LOL