{"id":14603,"date":"2015-11-21T08:48:54","date_gmt":"2015-11-21T13:48:54","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14603"},"modified":"2015-11-21T08:48:54","modified_gmt":"2015-11-21T13:48:54","slug":"the-mad-euro-project-just-got-a-lot-madder","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14603","title":{"rendered":"The Mad Euro Project Just Got A Lot Madder"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2015\/11\/20\/the-mad-euro-project-just-got-a-lot-madder\/\" target=\"_blank\">The Mad Euro Project Just Got A Lot Madder<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>Feeding a Monstrous Pile of Debt.<\/strong><\/p>\n<p>Under Mario Draghi\u2019s radical stewardship, the ECB seems determined to push the limits of monetary experimentation. And by all accounts, it\u2019s succeeding.<\/p>\n<p>This week saw numerous eurozone governments sell bonds at negative rates, an economic anomaly that has no place in a rational world. Even some mainstream economists still seem confused by it. Unfortunately, thanks to the tireless efforts of central bankers around the globe, we stopped living in a rational world a long time ago.<\/p>\n<h3><strong>Feeding a\u00a0Monstrous Pile of Debt<\/strong><\/h3>\n<p>The latest government to enjoy the perks of negative-interest-rate living is Portugal. That\u2019s right, Portugal, a country that four years ago was selling 12-month notes with an average yield of 6% amidst fears about the government\u2019s ability to service its monstrous debt pile, is now able to sell \u20ac1.1b billion\u00a0of 12-month debt at a -0.06% yield. In other words, if investors hold the bonds to maturity they will actually pay the Portuguese government \u2013 a government that doesn\u2019t yet exist \u2013 for the\u00a0<em>privilege<\/em>\u00a0of holding its debt.<\/p>\n<p>This is despite the fact that Portugal has not only a perpetually stagnating economy but also one of the highest debt-to-GDP ratios in the world. After four years of so-called \u201causterity,\u201d Portugal\u2019s combined public and private debt is now a mind-blowing 530% of GDP, with total corporate debt\u00a0<a href=\"http:\/\/www.bridgingeurope.net\/south-europe-debt-about-to-explode.html\">expected to reach<\/a>\u00a0240% of GDP.<\/p>\n<p>Most of the country\u2019s public debt is foreign owned, and while there aren\u2019t any reliable figures on who exactly owns\u00a0the private debt, it is a fair bet that it is also mainly foreigners (and, of course, local banks). In other words, the country\u2019s heavily-levered corporate sector is sitting upon the granddaddy of tick-tocking debt time bombs.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Mad Euro Project Just Got A Lot Madder Feeding a Monstrous Pile of Debt. Under Mario Draghi\u2019s radical stewardship, the ECB seems determined to push the limits of monetary experimentation. And by all accounts, it\u2019s succeeding. This week saw numerous eurozone governments sell bonds at negative rates, an economic anomaly that has no place [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,195,5660,233,280,281,282,284,10686,1768,1389,4255],"class_list":["post-14603","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-debt","tag-don-quijones","tag-ecb","tag-euro","tag-europe","tag-european-central-bank","tag-european-union","tag-mario-drag","tag-negative-interest-rate-policy","tag-nirp","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14603","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14603"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14603\/revisions"}],"predecessor-version":[{"id":14604,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14603\/revisions\/14604"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14603"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14603"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14603"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}