After taking a Holiday hiatus from the blogosphere, I thought I’d jump back in with one of my favorite topics of late — Europe. Scanning the foreign papers today I came across two interesting articles; both of which centered on Germany.
Story #1: Earlier today, Germany held a 6-month bond auction of $3.9 Billion Euro ($4.9 Billion). The auction was so successful, that the yield actually came in negative. That is, “investors” are paying Germany 0.01% interest for the privilege of owning these bonds! In that light, the 0.86% yield on a US 5-year doesn’t seem so bad.
Story #2: Greece is planning on doing some significant defense spending. In and of itself, that isn’t too surprising. They’ve long had a territorial dispute with Turkey involving Cyprus and a sometimes-deadly maritime border dispute in the Gulf of Aegean. What I found interesting was that a large part of the Greek hardware purchase is to be two submarines manufactured in Germany. So, if I have this right… Through various funding mechanisms Germany loans money to Greece to keep it from going belly-up. Then, Greece buys submarines from Germany using the borrowed funds.
You really can’t make this stuff up.
The epilogue to Story #2: Over Greece’s forecast period of 2011 – 2016, here is a list of other expected military procurements:
- Fourth-generation fighter jets
- Maritime patrol aircraft
- Advanced jet trainers
- Armored vehicles
- And my personal favorite… Attack Corvettes!
I don’t know what an Attack Corvette is, but I want one. Maybe once the Greek bankruptcy is officially declared I can pick up a low mileage, slightly-used AC at a distressed price. Better get a Carfax, though.