Just In: ECB Announces PAN EUROPEAN BONDS - Will It Destroy Treasury Market?

**ArcticSplash** · 08-05-2011, 01:25 PM

The European Central Bank has just made a STUNNING move... in exchange for Italy agreeing to pass a balanced budget amendment to their Constitution, the ECB will create continental bonds to cover Italy's debt (and probably also Spain), which is Europe's 3rd and 4th largest economies.

The creation of this bond market with these new securities will be a huge rival to United States Treasuries. This could put US debt in hot water now that Asians will really have a place to go that offers market depth and liquidity that only the US can provide right now.

**ArcticSplash** · 08-05-2011, 01:29 PM

News Headlines

If I was Ben Bernanke and Tim Geithner right now, I would be sh*tting bricks at the idea of a Eurozone bond. The Eurozone has the world's largest GDP and the most capital. A uniting of all the Euro central banks into a single array of Eurozone bonds means that Frankfurt will control the purse strings of every single Euro member. This would turn every euro country's central bank into just a branch office if the ECB takes over the role of issuing and financing all the debt for the Eurozone.

This will mean China will finally have a place to sell all their US debt with a place to go. If this thing is real and it's stable, kiss your low interest rates goodbye. If you haven't bought a house by now I would highly recommend you get into a mortgage before US bond yields push up; depending how fast the ECB can get up these new securities.

**Gio7707** · 08-05-2011, 02:56 PM

Yup...jesus...doomed

I think now I will go back home..

**Sharkfood** · 08-05-2011, 05:18 PM

With all your insight into the financial markets, I would expect your location to be "Sun Valley" or "St. Bart's", not "Couch surfing in Kensington."

**ArcticSplash** · 08-05-2011, 05:50 PM

Like Bernie Madoff?

**ArcticSplash** · 08-05-2011, 05:58 PM

Originally Posted by Gio7707

Yup...jesus...doomed

I think now I will go back home..

Printing the DJIA when the deal is not even set up doesn't even compute. Plus you would want to show the US10Y and US30Y bonds, not a stock chart.

**BarryG** · 08-05-2011, 06:04 PM

I don't see any mention of a continental bond in your linked article or anywhere else. There is a commission looking into a formal eurobond, but we are a ways away from that: European Commission to publish eurobond report: Rehn - *Latest news around the world and developments close to home - MSN Philippines News

Really a eurobond is the only way to save the euro. With all the politics and bickering that would go into that, it possible the euro just dies.

**Mr Morley** · 08-05-2011, 11:01 PM

The idea of Italy actually being able to maintain a balanced budget is like expecting your meth-addicted cousin not to do meth.

I have a simple solution to Italy's debt crisis: throw Berlusconi in prison and use his assets to cover the debt.

**Gio7707** · 08-07-2011, 06:21 PM

Originally Posted by Mr Morley

The idea of Italy actually being able to maintain a balanced budget is like expecting your meth-addicted cousin not to do meth.

I have a simple solution to Italy's debt crisis: throw Berlusconi in prison and use his assets to cover the debt.

LIKEWISE...

Unfortunately the law in Italy is corrupt ...so better be an outlaw then a lawabiding citizen ..