BilliamD75
Registered User
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- 71
Genius. Why has nobody ever thought of this?no interest payments on the debt
Genius. Why has nobody ever thought of this?
But you're not being ambitious enough - why only stop the interest payments? Why not just completely default on the debt? Can you imagine the savings?
No. He's confirmed he literally meant what he said...What @BilliamD75 probably means
If we are going to default at least we should do it properly and just give the two fingers to everyone.Yes the debt is to large for our working population, its either a euro bond or massive increases in the interest rate held by the private sector going forward on the roll over of debt, very tough decisions are going to be made, this may be the easiest option in time,
very tough decisions are going to be made, this may be the easiest option in time,
I think that, in time, some form of debt restructuring may be the only option. But I don't think we need to do it yet.
It would have huge negative consequences. Clearly we would be kicked out of the eurozone - that is not necessarily a bad thing.
Not sure if we would be kicked out of the EU?
As opposed to defaulting and seeing the next rate we need to borrow at going up considerably?
40 % of the national debt is owed to the e.c.b at 100 basis points, thats less than inflation across the EU, it's costing the e.c.b billions of euro on the nominal value of the bonds. That will change when Draghi leaves at the end of the year.
At the present time the e.c.b is mandated to buy 40% 80 billion so leaving about 120 billion in the private sector with an average yield of 425 basis points (4.25%).
Without the e.c.b the interest would be 9 billion average not including for risk purposes.
Now if your in the private sector and your bonds are maturing, would you repurchase at yields of 100 basis points, no way, you would want at least the same yield your getting as the e.c.b cannot purchase any more bonds.
Now if your the e.c.b with 80 billion of Irish bonds trying to offload to the private sector at 100 basis points, I would say good luck trying to get bids, (they will have to raise rates to get bids) they can repurchase but at some point they will offload the bonds at higher yields creating greater risks increasing higher premiums and so on.
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