Now investors pay to lend money to safe-haven Britain

January 11th, 2012

FAKE NEWS for the Zionist agenda

By
Hugo Duncan and James Chapman

Last updated at 2:34 AM on 11th January 2012

Investors paid for the right to lend money to the UK yesterday, amid fresh fears over the future of the eurozone.

The Government sold £700million of bonds – long-term IOUs – in an extraordinary auction that saw it charge lenders to take on the debt.

Governments usually have to pay to borrow on international money markets, but Britain’s austerity measures mean it has emerged as a safe haven while the single currency crisis rages.

Investors are paying for the right to lend money to the UK as Britain emerged as a safe haven while the euro struggles

Once inflation is taken into account, the interest rate charged by lenders for 35-year bonds hit minus 0.116 per cent – meaning the Government will make rather than lose money on the deal.

By contrast, debt-stricken countries in the eurozone are being charged higher and higher rates to borrow.

To make matters worse, ratings agency Fitch warned yesterday that a number of countries – including Italy – could see their credit ratings downgraded by the end of this month.

It claimed that Italy is the biggest cause for alarm – and added that bailed-out Greece could crash out of the single currency by the end of the year.

Yet as fears grow about the ability of many European nations to pay their way, Britain and Germany are emerging as the countries of choice for investors seeking shelter from the financial storm.

A source close to Chancellor George Osborne said of yesterday’s events: ‘This reinforces how our plan is delivering fiscal credibility, which in turn is delivering low interest rates for families and businesses up and down the country. Labour would put all that at risk.’

Michael Hewson, an analyst at CMC Markets, said the negative yield – the situation whereby investors must pay to lend – was ‘unusual but indicative of the times we are trading in’.

A source close to George Osborne said the development demonstrates the government's promise of delivering 'fiscal credibility'

A source close to George Osborne said the development demonstrates the government’s promise of delivering ‘fiscal credibility’

He added: ‘Our economy is not immune to the eurozone troubles, but the UK won’t default because the Bank [of England] will print more money. Whether it will be the same value is another thing, but you will always get your money back.’

Another City analyst, David Buik of BGC Partners, agreed that the auction was a testament to Britain’s strength.

‘It is another classic illustration of a flight to quality created by an immeasurable slew of fear of the unknown,’ he said.

David Miller, a partner at Cheviot Asset Management, said investors ‘view Britain as a safe haven and a beacon of sanity in Europe’. He continued: ‘The low borrowing rate will give us a firm foundation for economic recovery.’

The outlook is less sunny for those on the Continent. Fitch said it was concerned about the weak economic outlook across Europe, and is urging the European Central Bank to step up its attempts to solve the crisis, notably by buying more government bonds.

Fitch’s head of sovereign ratings, David Riley, said Italy, Spain, Belgium, Ireland, Slovenia and Cyprus were all on so-called ‘negative watch’.

France, the eurozone’s second-largest economy, is also facing difficulties because of its debt burden, which is over 80 percent of GDP, he said.

But the biggest risk is Italy, which is the third-largest eurozone economy and is considered too big to bail out. It needs to raise up to €360billion to fund its massive national debt.

‘The future of the euro will be decided at the gates of Rome,’ Mr Riley said.

The warning comes amid signs that countries are losing faith in the European dream.

The Italian Social Democrats will today come out against the European Union and the euro, while seven Eastern European countries that recently joined the EU – Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania, Poland and Romania – have already announced that they hope to re-examine any commitments to adopt the euro.

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I wouldnt say this was a great thing, the us with debts now passing a 100% of gdp, has had a great bond sale, thing is, the people buying the bonds, are the bankers, and financiers, that are using your pension money to buy the bonds, so they dont really care what happens, when the usa default (which they will, because their is not enough money in the world to keep them afloat) all that happens, is the bonds dont get paid back, and your pensions drop, and the people who bought them, still get their bonuses, but taken out of your investements, not out of the profits on them, head i win, tales you lose, strangely, the german bond sale didnt do too well, people prefer inveting in bonds, issued by countries that have and produce nothing, rather than countries, liker germany that produce mecedes, bmw, tools, and engineering machinery that is exported all over the world, weird.

– Stuart , Glasgow, 11/1/2012 05:57

When the Euro was weak 5 years ago, you were saying that it was a big failure, now that the pound has devalued by a third against the Euro, you are saying that the pound is a great success. It is NOT, all workers’ pensions and savings have lost a third of their real value by this watering down of the pound. The Euro has been strong, but the banksters tried to pick one country off at a time, but now there is fiscal union and they can no longer do this. Cameron vetoed this because the EU wanted to tax the banksters who got us into this mess.
Of course the naive jingoists can be easily persuaded , the EU is an easy target, but it is the banksters who are the true culprits, but the banksters are the chums of the DM’s owners

– ian martin, north yorkshire, 11/1/2012 05:29

We will be bailing them out when they go bust.

– kevin, newcastle, 11/1/2012 04:47

So, lets just borrow another £862,068,965,517,241. By my reckoning at 0.116% that should earn us about £1,000,000,000,000. At very least a big chunk off the national debt ! Who said you can’t borrow your way out of debt. Alas, if only life were that simple. Lol. ps: don’t tell Ed Balls, he’d borrow the money but probably end up with new wallpaper instead of doing “the right thing” !

– Steve, Philippines, 11/1/2012 04:39

Eat your heart out Sarkosy, the markets have spoken !!!

– Mike, alicante, 11/1/2012 04:16

The Euro zone is dead in the water. The United Kingdom is and always was a country of stability and a safe port in a storm , as we can see the deposits are pouring in.
Shame the US feel bad about the the euro crisis ,they would like to be in our economic position , i thought they were the ones that initiated it with there toxic debts sold to Bradford and Bingley .
All we need now is to divorce ourselves from the rest of Europe, bring in strict border controls and our economy will boom.

– Stuart Benjamin, Balneariou , Santa Catarina , Brasil., 11/1/2012 03:32

I hope Osborne is borrowing at this low rate top pay off the debt which is at a much higher rate.

– Jim, Soke of Peterborough Soviet EU, 11/1/2012 03:21

The Eurocrisis is telling us all that there are more things wrong than right for the Euro Zone in its current form.

– Dave, London, 11/1/2012 01:56

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