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Germany Set to Issue Bonds at 0% as Investors Seek Refuge
Hi Sven. Yes, this is exactly what I was concerned about in a bond discussion here a week or so ago. (1) We may very well have to raise interest rates here to deflect gathering inflationary pressures, and that of course will draw lots of "hot money" to the US, and therefore, away from the EU, making things even worse over there. I just can't see how that is going to work out without grief for somebody. (2)
(1) Sorry, MJG, but I don't have the specific posting references easily at hand. (2) Sorry some more MJG, but that's just my opinion, which contravenes your new posting rules.
Seems cash might be the better choice as there is no lock up to maturity with cash ... and, who would want to buy a zero interest rate bond? Not me. My brain just done not compute in this median of thought and logic. My best guess is that they must want to drive investment dollars towards their stock market. Perhaps some investment dollars will move abroad as money usually travels to where it is treated best. But, do they really want investment dollars leaving the country? Perhaps, they want to provide cheap money for the housing sector. Buy Now ... Pay Later ... Zero Interest! We shall see.
Hi Skeet- Just a guess (another blatant crime against logic, of course)- but how about EU banks, which are required to maintain specific reserve levels. Hard to imagine them going for US stuff, but other than them, I have no idea.
Comments
(1) Sorry, MJG, but I don't have the specific posting references easily at hand.
(2) Sorry some more MJG, but that's just my opinion, which contravenes your new posting rules.
Old_Skeet