How Long Will It Take For The ECB To Own All Sovereign Debt Of Spain, Germany, France?

Tyler Durden's picture

Submitted by Michael Shedlock via,

Huky Guru on Guru’s Blog posted a chart that answers the question: How Long Will it Take For the ECB to Own All Sovereign Debt of Eurozone Countries?

ECB QE How Long



At the current rate of purchase of sovereign bonds the ECB will have have purchased all sovereign debt issued by Spain in 9 years and Germany in 8.8 years.


Bond Market Distortion

Distortion in the corporate bond market has picked up since the ECB has started buying corporate bonds.

Bond Spreads Eurozone


The above chart shows a comparison between the yields of bonds eligible to be purchased by the ECB and bonds with the same rating in the same sector that are not eligible for the ECB.

Corporate bond yields have collapsed across the board since the ECB’s announcement, but even more so for eligible bonds.


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BetaGap's picture

So, it will end soon and everything is awesome?

Multi's picture

How Long Will It Take For The ECB To Own All Sovereign Debt Of Spain, Germany, France?


Those countries will just increase their spending accordingly. Let's just reframe the question: how long will it take for the politicians in Spain, Germany, and France to get all the money that they want to get?

Haus-Targaryen's picture

Never, they are politicians.  

That being said, I do look at this number as a "long-stop" date.  The more the ECB purchases, the more artifical demand they pump into the secondary bond market, the lower rates go.  As institutional investors let their sovereign debt mature -- sovereigns will have to issue more, but due to the negative yields (no return of or return on investment) many IIs cannot invest, say in Bunds again and start looking elsewhere (Polish sovereign debt, 10 years trading at 2.68% this morning) as an example. It means that with time, the ECB will destroy the markets for many financial instruments as it buys everything available with freshly printed euros.

This continues until the currency gives out -- absent something catastrophic happening.  

GreatUncle's picture

Haus I was more interested in the rate, like Germany is 2x the rate of Spain to achieve a similar end time.

How can that be Germany being the pin-up girl of the euro?

StackShinyStuff's picture

How long?  Day or two.  Tops. 

Bunga Bunga's picture

Central bank magic, Draghi is a genius. He saved the world, all get rich!

FlipFlop's picture

Exactly....what is the fucking problem. The miracle has worked...well...system has not collapsed outright....for 10 years. Social security funded by fresh bits from ECB....fresh money buys stuff...where is the problem? Everybody happy :)

wildbad's picture

this is GREAT!

eekastar's picture

Nope, this is a trap.

How the hell can a country leave the EU when all it's debs are owned by ECB?!

HenryKissingerChurchill's picture

they can leave the EU all rigjt

but since the ECB owns all their debt they will be now a EU colony

pathosattrition's picture

Once all the debt is monetized, inflation will approach infinity.

Fuku Ben's picture

If they didn't present themselves as legitimate this would be the equivalent of a rival organized crime boss buying up someone's markers from a loan shark so they can put the screws to them.

If they can't bankrupt you and force you to get bailed out through the IMF and own and control you that way they'll print enough fraudulent fiat through a central bank to buy it all up, own and control you that way.

As I keep saying one way or another they're going to steal it all. And every way they do it is one giant organized criminally racketeered fraud.

Lore's picture

These nations are on a scripted path to ruin unless / until somebody stands up and pushes back. It's not complicated. 

katchum's picture

Wake me up in 10 years.

CatsPaw's picture

That moment when you notice germany has more problems than spain?

Cus if I am reading this right, thats what it looks like.

UnacknowledgedX's picture

"Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money."

Source: Silas Walter Adams (1958). The legalized crime of banking and a constitutional remedy. Boston: Meador. pp. 13,30,58,90,246. OCLC 3906807. Also available as web transcription.

GreatUncle's picture

Question on the article - how long is a piece of string to say you will buy it within 8 or 9 years.

Going to say the same you to make an estimation of who does what.

Off debt clocks,  Spain 1.1 trillion sovereign debt, German 2.1 trillion so preferential treatment is being given to German sovereign debt at 2x rate of Spain.

So let me think ... store food, conscription, DB ceo basically admitting they are bust now the ECB buying up German sovereign debt 2x the rate of Spain.

Think what you want, keep the list coming.

GreatUncle's picture

Had a look at the UK one, 1.7 trillion GBP, so about 2.2 trillion euros.

Why do this one? This is a single central bank compared to the ECB super central bank.

What you can glean from this is the scale of the ECB monetization program that is going absolutely nowhere.

Now Greek sovereign debt ... 317 billion euros or so a drop in the monetization ocean for the ECB.

Sauerkraut-Opinion's picture

....Germans are the biggest loosers in that game as their buying power declines without need and pensions interest rates are near zero.  

Blopper's picture

All the countries of the world (except the US and UK) should let the IMF, World Bank and ECB to buy up all their debts and then default on all of them. Let the Rothschild banking cartel lose all their investments (except in the US and UK). The countries have the sovereign right to choose default.

The US and UK are exempted because their governments are 100% owned by the Rothschilds, so there is no salvation for the US and UK.

All is chosen's picture

What a relief! The author forgot Portugal's existence*. Does that mean I get to keep the farm?


*Note: it's the bit tacked onto the left hand side of Spain, but with a different name ..... (once proud sea-faring nation, 'owned' half the world ... ).

Vin's picture

Maybe there's a silver lining here. If the central banks own all the debt, then no one is hurt if the nations just cancel their debt.

Now that would be justice.

Sauerkraut-Opinion's picture

The debt won't be gone but rather in ordinary people wallet.