UptheDeise
Registered User
- Messages
- 272
So if this recession last for a few years the government will have to sell more bonds to pay off the mature bonds and to keep the country afloat.
So in other words what we have going on here is a ponzi scheme.
Good grief.
Ok, here's a few things I would like some answers to.
The government needs to borrow a few billion this year to keep the country a float.
So the Government borrows this money by issuing governments bonds (gilts)?
Yes, mostly bonds. But also short-term borrowing. Also borrowing via personal savings (An Post)
Who may buy this gilts?
In theory, anybody. In practice, banks, pension funds, insurance companies, CUs, foreign banks, etc.
These gilts will have a maturity date with interest paid out each year that they are held?
Yes. Usually 5, 10, 15 or 20 years. The UK go to 40 yrs, also some of them are perpetual (never pay back).
When the interest is due and the gilts mature where does the government get the money to pay out on these?
It usually rolls over the debt, or if it has a surplus it may not need fresh loans.
Who actually loans us this money? What will happen if they stop lending us all this money? The country goes bankrupt... then what?
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