(Zerohedge) Germany will, for the first time, sell two-year bonds on Wednesday that won’t make scheduled interest rate payments, a ringing endorsement of the safe appeal of German debt and a reflection of increased market nervousness over the composition and direction of the euro zone.
The German federal government Tuesday set a zero coupon on a new issue of two-year federal Treasury notes, or Schatz. Germany will auction €5 billion ($6.41 billion) of the two-year note on Wednesday.
While other countries have sold zero-coupon bonds in the past, these offerings were designed as such to meet demand from a certain group of investors rather than being a reflection of a country’s slumping borrowing costs.
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So Germany has now decided to go ZIRP. The closest thing Europe has to a sound economy is Germany, and now they are imitating the biggest debtor nation on Earth [the US]. I guess when you figure you will be giving the money away to cover other nations’ debts, without much hope of return, you might as well not pay any interest. It’s just paper, anyway… waste all you want, they’ll just print more!
Frequently of late, I find myself going back to some words of wisdom I learned in my youth;
…
Hope you’ve got your things together
Hope you are quite prepared to die
Looks like we’re in for nasty weather
One eye is taken for an eye…
