Lagarde’s Printer Turns Greek Debt Negative

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For the first time probably in history, the debt stricken Greek government is being paid by ‘the market’ to borrow from them. Two year bond yields have fallen into negative territory at -0.02. For six months, yields are at -0.11. While for three years, they stand at -0.05. In an astonishing twist in just eight years, the Greek government has gone from paying 35% in interest for long term loans of 10 years, to being paid 0.05% to take out loans for a period of three years. This is due to Christine Lagarde, the ECB chief, implementing the Modern Monetary Theory which in practice goes like this. Gov goes to commercial banks to borrow. Those commercial banks package this borrowing into bonds, which they sell onto the market. Except, it is only a small portion of ‘the market’ that buys these bonds. The vast majority of them are bought by…

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