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Bankers condemn ECB purchase of Greek bonds

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posted on May, 30 2010 @ 08:37 AM
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Bankers condemn ECB purchase of Greek bonds


www.thelocal.de

Germany's national bank, the Deutsche Bundesbank, has shown signs of irritation that the European Central Bank (ECB) has chosen to buy the state bonds of highly indebted eurozone countries.

The bankers complained that by buying the Greek bonds, the ECB was keeping their price artificially high, and other banks, notably French ones, were consequently using the opportunity to sell their Greek bonds in order to clean up their finances.

(visit the link for the full news article)




posted on May, 30 2010 @ 08:37 AM
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The report claims that some high-ranking German bankers suspect a French conspiracy, saying that ECB head Jean-Claude Trichet, a Frenchman, had been put under pressure by French president Nicolas Sarkozy to break one of the ECB's golden rules – never to buy government bonds from member states.


And here we go again. National interests are once again showing that the EU does not work. France, Germany and Britain have an exposure to Greek bonds of respectively $36, $45 and $75 billion.

While the German government had committed themselves to keep their Greek government bonds and neither terminate nor reduce existing bonds until 2013, at least, France is more than eager to get rid of these risky bonds. Considering their huge exposure, this is an understandable move, but one motivated by selfishness.

With the ECB breaking this rule, France now has an opportunity to dump its Greek bonds at a high rate, hence minimizing its losses and at the same time greatly reducing exposure to Greek bonds.

www.thelocal.de
(visit the link for the full news article)



posted on May, 30 2010 @ 08:50 AM
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Fear overcomes greed and nobody wants to be the one left holding the bag full of steaming Greek debt.

As Porky Pig used to say, "that's all folks". It's about to become a race to the bottom.



 
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