http://www.guardian.co.uk/...
Germany is issuing interest-free bonds. No, not tax-free bonds, interest-free. What's next, interest-free bonds for a fee?
Pay me to take your money!!!!
Here's how some analysts read this announcement:
Germany is going to do something quite remarkable tomorrow, it's going to auction some debt with an official rate of return of zero.
The Bundesbank will offer €5bn of 2-year debt (Schatz, in the bond market jargon) with a coupon of 0%. This reflects the popularity of German debt, which has meant investors have been prepared to accept almost no profit in exchange for somewhere safe for their money.
Now, they are being offered bonds that will not make scheduled interest payment at all - just the face value of the bond in two years time.
Marc Ostwald, strategist at Monument Securities, said the move was a sign that the financial markets no longer function properly, saying:
If this is not a signal of complete financial market dislocation, nothing is!
Ostwald added that the eurozone crisis is forcing 'real money investors' to quit paper assets in favour of physical assets (gold bullion, land, commodities). He argued:
This spells major trouble for the financial sector, which they will increasingly leave to fall on its own sword, and for governments, as this is a tacit recognition that not only does money have no inherent value as we all know, BUT ALSO that money no longer even represent a proxy for the value of goods.
As credit stops flowing through our finance centers and thus our governments and banks, there will be only one possible solution. Gov'ts will have to take over.
Or, as Marx might have put it (I was always partial to Harpo), "We're all Socialists now!"