Courtesy of Mish.
In yet another sign of economic madness, investors have concluded that rates in Belgium are likely to stay low for decades to come.
Via translation, please consider Unidentified Investors Lent Belgium €50 Million for 100 Years at 2.5% Interest.
The director of the Belgium debt agency, Jean Deboutte, announced Belgium borrowed 50 million euros, for a hundred years at an interest rate 2.5 percent.
The borrowing for a hundred years is via EMTN loans. These are loans with more flexible conditions than the traditional OLO government bonds.
Who granted Belgium the loan is unknown.
"These are professional investors. Goldman Sachs International contacted us stating that it had investors who were interested in such a long term investment," said Deboutte.
According Deboutte, hundred year life of this debt shows that investors have great confidence in the reliability of Belgium as a good payer.
EMTN Defined
I looked up the term "EMTN". It stands for Euro Medium Term Note. If 100 years is "medium term", dare I ask the definition of "long term"?
100 years at 2.5% and flexible conditions. What can possibly go wrong with that?
In the grand scheme of things €50 Million is a trivial amount to the global economy. Nonetheless, the transaction does reflect how one-sided sentiment is in belief of perpetually low rates.
Mike "Mish" Shedlock
