Who will buy my sweet...

Generali

...Government Bonds?
(a nice song before the thorny bit, pun intended)

http://www.bloomberg.com/news/2012-01-03/world-s-biggest-economies-face-7-6-trillion-bond-tab-as-rally-seen-fading.html

Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs....

These are the biggies:

Country....2012 Bond, Bill Redemptions ($).........Coupon Payments
Japan.............3,000,000,000,000...............117,000,000,000
U.S...............2,783,000,000,000...............212,000,000,000
Italy...............428,000,000,000................72,000,000,000
France..............367,000,000,000................54,000,000,000
Germany.............285,000,000,000................45,000,000,000
Canada..............221,000,000,000................14,000,000,000
Brazil..............169,000,000,000................31,000,000,000
U.K.................165,000,000,000................67,000,000,000
China...............121,000,000,000................41,000,000,000
India................57,000,000,000................39,000,000,000
Russia...............13,000,000,000.................9,000,000,000

The coupon payments column is the total amount of debt interest that each country is predicted to have to find. The first column of numbers is the amount of debt that is scheduled to be repaid.

Now ordinarily, the repayment of Government debt is simply deferred by issuing more bonds and using the money to repay the last lot. So who here fancies lending money to Italy, France or Russia at the moment?

A word to the wise. The big phrase in the financial press this year will be 'financial repression'. It's a process whereby Governments stiff the populace to pay back or hold Government debt rather than transparently taxing them. That way they get a chunk of your wealth as well as your income.

michaels

Easy enough to do - just insist that pension companies, banks, insurance cos or whatever have to hold a certain proportion of assets as govt bonds (for prudential reasons of course). May be even ISAs should be converted to govt bonds for 'the security of the saver'...

Re the bond redemptions/roll over. Of course all the money that the govts pay back as bonds mature needs to find a home and where else can it really go apart from more govt bonds? Of course it can change from one countries bonds to another so I guess in a zero sum game the 'winners' will be the countries whose bonds are the most attractive and can thus reborrow at the lowest yields. The UK debt management office has been prdentially keeping UK average maturities long but your table demonstrates this is at the cost of higher interest rate bills.

ILW

Generali wrote: »

...Government Bonds?
(a nice song before the thorny bit, pun intended)

http://www.bloomberg.com/news/2012-01-03/world-s-biggest-economies-face-7-6-trillion-bond-tab-as-rally-seen-fading.html

These are the biggies:

Country....2012 Bond, Bill Redemptions ($).........Coupon Payments
Japan.............3,000,000,000,000...............117,000,000,000
U.S...............2,783,000,000,000...............212,000,000,000
Italy...............428,000,000,000................72,000,000,000
France..............367,000,000,000................54,000,000,000
Germany.............285,000,000,000................45,000,000,000
Canada..............221,000,000,000................14,000,000,000
Brazil..............169,000,000,000................31,000,000,000
U.K.................165,000,000,000................67,000,000,000
China...............121,000,000,000................41,000,000,000
India................57,000,000,000................39,000,000,000
Russia...............13,000,000,000.................9,000,000,000

The coupon payments column is the total amount of debt interest that each country is predicted to have to find. The first column of numbers is the amount of debt that is scheduled to be repaid.

Now ordinarily, the repayment of Government debt is simply deferred by issuing more bonds and using the money to repay the last lot. So who here fancies lending money to Italy, France or Russia at the moment?

A word to the wise. The big phrase in the financial press this year will be 'financial repression'. It's a process whereby Governments stiff the populace to pay back or hold Government debt rather than transparently taxing them. That way they get a chunk of your wealth as well as your income.

Why Russia?

Generali

ILW wrote: »

Why Russia?

Because they repudiated their debt in 1998, shortly before Vladimir Putin took office (and by which point he may well have been the power behind the throne). Would you lend to a country that said 13 years ago, "We aren't going to repay our debts. We can but we just don't fancy it."?

Ok, they probably couldn't repay their foreign currency debts but repaying Ruble debt is simple, you just print more Rubles.

Wookster

If you play with Russia you'll get your fingers burnt.

Indeed, global funding requirements for 2012 are enormous, absolutely enormous. We live in interesting times, indeed the next 8 weeks will be interesting from this perspective.

The Guardian has rather an interesting calendar of events (Euro-centric) here: http://www.guardian.co.uk/business/2012/jan/03/eurozone-crisis-events-january for those so who might have a keen interest in Eurozone events.

StevieJ

Generali wrote: »

Because they repudiated their debt in 1998, shortly before Vladimir Putin took office (and by which point he may well have been the power behind the throne). Would you lend to a country that said 13 years ago, "We aren't going to repay our debts. We can but we just don't fancy it."?

Ok, they probably couldn't repay their foreign currency debts but repaying Ruble debt is simple, you just print more Rubles.

Then again would you invest in a country where they can simply confiscate your assets for negligable compensation? re Shell and Sakhalin :eek:

In a surprise move, Russian prime minister Vladimir Putin invited Royal Dutch Shell to help develop two new oil and gas fields on Sakhalin Island, just three years after the government forced the company to cede majority control in the Sakhalin 2 project to state-controlled group Gazprom.

In its biggest resource nationalism drive in 2006, the Russian government forced Shell to sell its stake in the project to Gazprom for $7.5bn (£4.5bn). The Anglo-Dutch group retained a 27.5pc stake, with Gazprom holding 50pc plus one share. Mitsui owns 12.5pc of the project and Mitsubishi 10pc.

http://www.telegraph.co.uk/finance/newsbysector/energy/5676869/Russia-invites-Shell-back-to-Sakhalin-as-finances-plummet.html

Ilya_Ilyich

Generali wrote: »

...It's a process whereby Governments stiff the populace to pay back or hold Government debt rather than transparently taxing them. That way they get a chunk of your wealth as well as your income.

Can you clarify who the 'they' in your final sentence refers to?

kabayiri

Generali wrote: »

...
A word to the wise. The big phrase in the financial press this year will be 'financial repression'. It's a process whereby Governments stiff the populace to pay back or hold Government debt rather than transparently taxing them. That way they get a chunk of your wealth as well as your income.

That's a bit like saying the upcoming fashion trend is for sack cloths trimmed at the knees, with ash laden sleeves.

You know you will fit in with the rest of them, but it hardly fills you with pleasure doing so.