ringledman
Registered User
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- 620
This is the story for all the West over the next decade.
Rising bond yields, falling bond prices, inflation, currency crashes, falling standards of living and potentially bankruptcies.
http://uk.finance.yahoo.com/news/greek-borrowing-rate-rises-to-7621-afp-d6576178ab87.html?x=0
Greek borrowing rate rises to 7.621%
13:15, Monday 19 April 2010
The interest rate which Greece has to offer to borrow money for 10 years rose to 7.621 percent on international bond markets on Monday, above a level which Athens has already called untenable.
The rate, or yield on the bonds rose at one point to 7.631 percent, a record since the eurozone was created, from 7.366 percent late on Friday.
The latest rate means that Greece has to pay 4.55 percentage points more than eurozone benchmark country Germany to borrow for 10 years, from a difference of 4.28 points on Friday.
At the end of last week Greece said that it was doing all the preparatory work needed in the event that it asks the European Union and International Monetary Fund to activate a debt-rescue package.
The package, to make available up to 30 billion euros (41 billion dollars) from the EU and half as much again from the IMF in the first year, has been agreed in principle.
A team from the IMF arrived in Athens on Monday despite disruptions to air traffic but will wait for two EU groups to arrive before opening talks on any debt rescue plan, the finance ministry said.
This has left financial markets in considerable uncertainty over the outlook for management of the Greek debt crisis which has already weakened the euro, caused deep disagreements within the European Union, and undermined the prestige and outlook for the eurozone.
On Tuesday, Greece is due to try to raise 1.5 billion euros with the issue of short-term three-month treasury bills.
Government bonds carry a fixed return per year in cash terms at issue. The bonds may be traded at any time, and the overall market is continuous, with the price of bonds rising or falling if the cash return relative to risk appears attractive or not.
In the case of Greece, as the bonds fall in price, the cash return as a percentage of the price rises. This sets the base level of interest rate which the government must offer to borrow more funds.
Greece must borrow about 11 billion euros by the end of May just to redeem old debt falling due and avoid partial default.
The high yield on Greek bonds is affecting yields on debt issued by some other eurozone countries considered to be at risk from heavy debt and public deficits.
The yield on Portuguese 10-year debt rose to 4.511 percent on Monday from 4.462 percent late on Friday, and on debt issued by Ireland to 4.594 percent from 4.555 percent.
Rising bond yields, falling bond prices, inflation, currency crashes, falling standards of living and potentially bankruptcies.
http://uk.finance.yahoo.com/news/greek-borrowing-rate-rises-to-7621-afp-d6576178ab87.html?x=0
Greek borrowing rate rises to 7.621%
13:15, Monday 19 April 2010
The interest rate which Greece has to offer to borrow money for 10 years rose to 7.621 percent on international bond markets on Monday, above a level which Athens has already called untenable.
The rate, or yield on the bonds rose at one point to 7.631 percent, a record since the eurozone was created, from 7.366 percent late on Friday.
The latest rate means that Greece has to pay 4.55 percentage points more than eurozone benchmark country Germany to borrow for 10 years, from a difference of 4.28 points on Friday.
At the end of last week Greece said that it was doing all the preparatory work needed in the event that it asks the European Union and International Monetary Fund to activate a debt-rescue package.
The package, to make available up to 30 billion euros (41 billion dollars) from the EU and half as much again from the IMF in the first year, has been agreed in principle.
A team from the IMF arrived in Athens on Monday despite disruptions to air traffic but will wait for two EU groups to arrive before opening talks on any debt rescue plan, the finance ministry said.
This has left financial markets in considerable uncertainty over the outlook for management of the Greek debt crisis which has already weakened the euro, caused deep disagreements within the European Union, and undermined the prestige and outlook for the eurozone.
On Tuesday, Greece is due to try to raise 1.5 billion euros with the issue of short-term three-month treasury bills.
Government bonds carry a fixed return per year in cash terms at issue. The bonds may be traded at any time, and the overall market is continuous, with the price of bonds rising or falling if the cash return relative to risk appears attractive or not.
In the case of Greece, as the bonds fall in price, the cash return as a percentage of the price rises. This sets the base level of interest rate which the government must offer to borrow more funds.
Greece must borrow about 11 billion euros by the end of May just to redeem old debt falling due and avoid partial default.
The high yield on Greek bonds is affecting yields on debt issued by some other eurozone countries considered to be at risk from heavy debt and public deficits.
The yield on Portuguese 10-year debt rose to 4.511 percent on Monday from 4.462 percent late on Friday, and on debt issued by Ireland to 4.594 percent from 4.555 percent.