Who is buying the new Greek debt?

   Looking for… a lender to give me $4 billion on an interest of 5% and real probability to get back about half of them. Yea, it will be a great deal for me, it is not this the point. I will not complain. I am just looking a candidate for lending…
   If you think I have overdone with alcohol, don’t be so rude. I am just hoping the same chance as Greek government received today. Yes, they succeeded in selling 5-year securities at a price of less than 5% yearly interest. It is not a joke. The same Greece that received 300 billion euros in bailout funding and still owes this money to its creditors. By the way – these creditors are privileged ones and will have their money before any other investor, including the brave buyers of today’s emission. The same Greece that dragged down with her Cyprus, which banks crashed due to unpaid old Greek debt. In Cyprus are still active capital outflow limitations that had to be “temporary”.

   And today the government in Athens issued the first successful post crisis emission and… received a demand exceeding the size of the offered debt. So if these investors still have free money to waste, I am here. I promise I will be a good spender of the loan :)
   In fact it is not only Greece. Suddenly and as of nowhere disappeared all financial problems of Italy and Spain, and French problems never appeared. How this happens? Who pays so generously?
   You and me. Believe me, it is you and me.
   These funny low interests are not real. They are result of the extreme money-print policy of European Central Bank. The bank gives unlimited loans at 0,25% interest. Banks are taking this money and buying government debt. As this debt is declared “absolutely secure” nobody can blame the banks for this. So with Greece they are making nearly 5% profit, while with Germany the profit is about 2%. Bank managers are taking their enormous bonuses for “good financial results” and everyone is happy. If and when the debtor goes bankrupt, the bankers are innocent, because they have invested in a guaranteed asset. It is not their fault the country went bankrupt. So it is not their fault the bank also is going bankrupt :)
   The only problem is the size of money-print. As against this money stays no good or service, so sooner or later inflation is inevitable. So guess again who the generous creditor is :)
   I am still looking for my $4 billion…

Dobri
April 10th 2014

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