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Wednesday, January 27, 2010

The Greek Euro. It's Only A Question Of Time.


The rumors that China might want to buy Greek bonds have been denied by China. The Greek Euro is unloved and Greece is having to pay ever higher rates to finance its debts. This is getting like Britain trying to stay inside the ERM. It's only a question of time and the interest rate demanded goes so high, it becomes inevitable that Greece will be out of the Euro.

From the FT.

Greek benchmark 10-year bond yields, which have an inverse relationship with prices, rose to 6.42 per cent on Wednesday, an 18 basis point rise on the day and more than 150bps higher than at the start of December last year.

Greek yields are trading 332 basis points over Germany, up 28 basis points on the day, as investors demanded a much bigger premium to buy Greek debt.


The chart at the top is the euro valued in US$ for the last six months. The Euro is close to going through psychologically important support levels, and heading lower, undermined by the Greek crisis.

2 comments:

caw said...

What an intelligent arrangement: Greece promisses more than 6.4% to collect EUROS while EURO-land either accepts the papers in due time or just implodes - if it still exists by then; China can not be interested as Greece has nothing to offer as to any resources, no energy but problems, olives and garlic.

a garlic and olives farmer said...

...Greece has nothing to offer as to any resources, no energy but problems, olives and garlic...

Caw, latest earth observation satellite "underground" analysis prove that Greece is in reality a ship of exotic metals afloat a sea of petrol. Also China is VERY interested in a JV with Greece, as Greece can serve as a beachfront for their transeuropean logistics operations due to the advantageous geographical location of Greek ports linking mainland Europe, Asia and Africa. The main reason of the Greek "accounting" crisis and the conservative goverment removal from office in Q4/09 (of course via "democratic" elections) was the wish of our euroangloatlantic friends/creditors/bankers/bosses to exploit these "garlics and olives" for the own interest...
N.B. It is also a great pitty that our fathers fought the Axis and destroyed financially their own nation by doing so in order to support the Angloamerican imperial interests (by delaying for months the Axis invasion of Russia.) We ought to know better what to expect as a reward...