This just popped up on the news wires. Ireland sells 500 million euros worth of 6 month treasury bills at a negative interest rate of MINUS -0.1%. This means that investors are happy to pay money to park their cash in Irish debt, a country that has a growing total national debt of 218.5 BILLION euros, for 6 months. How many of you out there think that this is completely NUTS! It is until you realise that the likely buyer of some of this debt is the European Central Bank (ECB) which is committed to a Quantitative Expansion (QE) programme of some 60 billion euros a month. Search for 'Ireland national debt clock' and see it ticking up. New figures published by the EU statistics office Eurostat in January this year show Irish debt now stands at 114.8% of GDP. It looks like the wizards of the world's central banks have come up with a new way to keep the wheels turning on the global economic wagon by reducing the debt burden on national governments. In addition to financing the debt themselves, the wizards create so much instability that people with savings (pension funds) buy sovereign bonds in order to get some semblance of protection against losses. Global QE is a beggar my neighbour policy that will destroy us all and when China responds to the latest moves by the US and Europe, the currency wars will take on a whole new dimension. Bring it on...
