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Japan Offers Gold Coins to Bond Buyers

cohodkcohodk Posts: 19,101 ✭✭✭✭✭
in Precious Metals
Japanese Finance Minister Jun Azumi will be rewarding investors who buy more than 10 million yen ($129,000) in reconstruction bonds with gold in the government’s latest attempt to bolster demand for the debt.


Individual investors who hold the bonds for three years will be eligible for a gold commemorative coin valued at 10,000 yen
Excuses are tools of the ignorant

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Comments

  • derrybderryb Posts: 36,793 ✭✭✭✭✭
    Enticement/bonuses to buy governement debt is a sure sign that no one wants to own government debt.

    Kinda like a bank that pays the highest interest on savings. the higher the interest they pay, the closer they are to insolvency.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • gecko109gecko109 Posts: 8,231 ✭
    So basically the Japanese gov is saying they will sell you $129k worth of bonds for $128k. They are offering a 7/10ths of 1% discount. Complete joke.
  • PerryHallPerryHall Posts: 46,111 ✭✭✭✭✭
    No thanks!image

    Worry is the interest you pay on a debt you may not owe.
    "Paper money eventually returns to its intrinsic value---zero."----Voltaire
    "Everything you say should be true, but not everything true should be said."----Voltaire

  • 57loaded57loaded Posts: 4,967 ✭✭✭


    << <i>So basically the Japanese gov is saying they will sell you $129k worth of bonds for $128k. They are offering a 7/10ths of 1% discount. Complete joke. >>



    grasshopper, these may have numismatic value someday due their rarity....image
  • Kd5ddoKd5ddo Posts: 208 ✭
    Complete Joke... Jeeze...
    Remember that the market can stay irrational longer than you can stay solvent.

    BSTs with: Coll3ctor, gsa1fan, mkman123, ajbauman, tydye, piecesofme, pursuitofliberty

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  • cjmezzcjmezz Posts: 467
    Free Gold? Where??? image
    "When someone tells you nothing is impossible, ask them to dribble a football"

    MANY positive BST Transactions
  • erickso1erickso1 Posts: 1,705 ✭✭✭


    << <i>So basically the Japanese gov is saying they will sell you $129k worth of bonds for $128k. They are offering a 7/10ths of 1% discount. Complete joke. >>




    In fixed income 7.75 basis points* is not something to sneeze at. Depending on the size of the position in relation to the total portfolio, those 7.75 basis points can be quite substantial when it comes to total return and the index and/or the competing portfolio managers you are running against.

    (* basis point is 1% of 1%, or .0001 , or .01% )
  • Kd5ddoKd5ddo Posts: 208 ✭
    But the additional 7.75 basis point s is not something that I would sway me to their Govt bonds. If I was already planning on purchasing those bonds, then I would gladly take the free gold. If the Japanese bonds we on my radar but I was undecided, I'd factor in the extra basis points. But i wouldn't invest in those bonds solely on the basis of the additional 'perk.'
    Remember that the market can stay irrational longer than you can stay solvent.

    BSTs with: Coll3ctor, gsa1fan, mkman123, ajbauman, tydye, piecesofme, pursuitofliberty

    Travelog - 20in20travels.com
  • erickso1erickso1 Posts: 1,705 ✭✭✭
    57.5 basis points return for 3 years (50 bp for the debt, 7.5 for the gold at today's prices) is 20 bps more then the 3 year treasury.

    7.5 bps for 3 years is not a small amount of extra yield to be earned in fixed income.


    ** Just to put it into context w/ what MJ said below my post, the 3 yr Japanese Govt bond is currently yielding 17 basis points.
  • JustacommemanJustacommeman Posts: 22,847 ✭✭✭✭✭


    << <i>57.5 basis points return for 3 years (50 bp for the debt, 7.5 for the gold at today's prices) is 20 bps more then the 3 year treasury.

    7.5 bps for 3 years is not a small amount of extra yield to be earned in fixed income. >>



    The Japanese are fastidious savers and very patriotic to a fault. This is a cause Japan will rally around. This may have greater appeal then one may think. It actually beats what they can get from most fixed income vehicles. MJ
    Walker Proof Digital Album
    Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
  • Kd5ddoKd5ddo Posts: 208 ✭


    << <i>The Japanese are fastidious savers and very patriotic to a fault. >>



    Ive heard this before and foe some reason I think I remember the saving rate to be well into the double digit percent of their income. Maybe 30% or so... Does that seem to mesh with what you've come across?
    Remember that the market can stay irrational longer than you can stay solvent.

    BSTs with: Coll3ctor, gsa1fan, mkman123, ajbauman, tydye, piecesofme, pursuitofliberty

    Travelog - 20in20travels.com
  • JustacommemanJustacommeman Posts: 22,847 ✭✭✭✭✭
    yes. but over the past several years the savings rates in Japan has been dwindling.as a whole with the population getting long in the tooth. Less to save.MJ
    Walker Proof Digital Album
    Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
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