Another Day, Another 100-Year Event

By Paul Kedrosky · November 1, 2011 · ·

Check the bund move in lthe ast twenty-four hours. Another day, another 100-year event.

Bund

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Comments

  1. oliver says:
    November 1, 2011 at 2:58 pm

    Maybe someone can fill me in, because I'm not an economist. With the German inflation rate at 2.5% — see http://www.tradingeconomics.com/germany/inflation… — they're basically enjoying a free lunch here? Not saying it's their fault, I'm only trying to understand the impact of these low bond rates on their public finances.

    • Paul Kedrosky says:
      November 1, 2011 at 3:05 pm

      You are correct.

      • oliver says:
        November 2, 2011 at 12:45 am

        Thanks. This really explains in hard numbers why the Germans are not eager to introduce Eurobonds. It really gives a cynical spin on quotes such as: "The German government has said eurobonds "don't make sense" right now, given that individual member states conduct their own economic policies." (quoted from http://www.bbc.co.uk/news/business-11743952 ). The solution is right under their noses, but they have no financial incentive to move quickly on this matter, until the crisis starts hurting their exports of course.