Trump Reportedly Offers to Buy $462 Billion in Italian Debt

Not sure how serious this reported "offer" is, but almost half a trillion dollars is a hefty amount of money.

Trump has reportedly offered US funds to buy Italian debt

Investing in debt is something I've never fully understood, I will admit that. I do understand that this is a fairly regular practice between various developed and emerging markets nations, but I would like to better understand why and for what? And with our own debt problems at home, this struck me as an interesting prospect. Something to "hold over" their heads in the future? A foreign policy move, an effort to strengthen economic relationships? What benefit is there to this, and is there a specific "need or want" that Trump or the US has that might benefit from this move?

More from the article:

According to Italian newspaper Corriere della Sera, Donald Trump offered to help finance Italy's 2019 public borrowing, when the Rome treasury is scheduled to issue about 400 billion euros ($462 billion) worth of debt.

Central banks all over have held interest rates at near-zero (some even in the negative) for a decade now. As interest rates rise, the burden of all of this global debt becomes more and more debilitating.

Can anyone offer some insights as to why the President is (reportedly) offering to buy all of this Italian debt, especially with the state of their economy?

a reply to: FamCore


Italy has a Baa2/BBB rating which is not great, I wouldn't buy it.

To get access to super models and Alfa Romeos?

a reply to: intrepid


Or Berlusconi's Boom-Boom Room, it's right up Donny Boy's alley.

Conte himself has said there were no figures nor guarantees
How did they come up with the amount ?
"Hey Rocky , watch me pull a rabbit out of the hat" (Bullwinkle and Rocky Show)
"Bullwinkle , that was no rabbit and it definitley wasn't your hat" (mine)

a reply to: AugustusMasonicus

Lifetime access to Berlusconi's bunga-bunga parties.

originally posted by: AugustusMasonicus
a reply to: FamCore

Italy has a Baa2/BBB rating which is not great, I wouldn't buy it.

I wouldn't buy any debt right now period, with the exception of Iceland, no country fixed what caused 08'. No one got punished, the same practices that led to that crisis still exist and the next one isn't an if, but when, and to what severity.

originally posted by: AugustusMasonicus
a reply to: intrepid


Or Berlusconi's Boom-Boom Room, it's right up Donny Boy's alley.

The wording of that is disturbing.

originally posted by: SlapMonkey

originally posted by: AugustusMasonicus
a reply to: intrepid


Or Berlusconi's Boom-Boom Room, it's right up Donny Boy's alley.

The wording of that is disturbing.

Which gives credence to the idea hahah.

originally posted by: intrepid
To get access to super models

they have to speak 'perfect English' though.

originally posted by: odzeandennz

originally posted by: intrepid
To get access to super models

they have to speak 'perfect English' though.

First lesson can you say "N", next lesson can you say "D" 3rd lesson can you say "A", excellent you have passed now can you just sign here please

originally posted by: SlapMonkey

The wording of that is disturbing.

Totally intended.

Here is a nice little map of what a trillion dollars get you www.zerohedge.com...

As for what a billion dollars a year gets you, it runs a large size metropolitan hospital for a year. Yeah some for these drug prices suck a bit, try shopping in India. It is capitalism.

Sounds like Italy, along with the rest of the southern EU is hurting a bit.

Yeah.

I'll take a Ferrari as collateral.

Buy low, sell high. Buy the debt for 462 billion, and then sell it to uhh lets say for instance China for a trillion. I'd like to make 538 billion wouldn't you?

I have enjoyed a lot of these comments so far, I'm not going to lie

That being said, can anyone enlighten me as to why buying the debt of other countries would be a smart "investment" vehicle? Whether financially or otherwise?

a reply to: UpIsNowDown

Wise move. Debt is a tangible asset and the ability of a country to renege on debt is the act of destroying one's own economy and currency. The benefits far out weight the risk.

It gives a position of strength when negotiating trade deals with the entire EU.
It creates a trading atmosphere where America is preferred due to America owning so much of its debt.

It strengthens their recovery because if America owns its debt then others will want a piece of the pie and for that it will generate American sentiment.

originally posted by: NightFlight
Buy low, sell high. Buy the debt for 468 billion, and then sell it to uhh lets say for instance China for a trillion. I'd like to make 532 billion wouldn't you?

Yup, or they could Greece us, and we buy low and then buy again.

Maybe he is going for leverage over the Italian government, rather than a pure dollar profit?

I can imagine that the broadly anti EU consensus in parliament could easily be pushed towards announcing a referendum on membership.

originally posted by: FamCore
That being said, can anyone enlighten me as to why buying the debt of other countries would be a smart "investment" vehicle? Whether financially or otherwise?

My money is it's more of a statement to the EU than an investment. Most of the indicators point to it's not a smart investment for financial gain.