In the continuing theme of keeping our eye firmly fixed to the periphery of the financial universe, watching for clues that things are about to change, we note that Poland recently suffered a bond auction failure.
Why doesn’t Poland just print up the money from their central bank and buy them themselves, like the US and the UK?
I don’t really know. When the Federal Reserve does this, there seems to be no impact on the dollar, interest rates, or bond prices, so perhaps the Polish central bankers should go to the US for a tour of the facilities and learn which buttons they need to push, and in which order, to accomplish the miracle results the US has enjoyed.
Sell Polish Bonds on Worsening Finances, BNP Says
Sept. 10 (Bloomberg) — Investors should sell Polish government bonds because of a “very dangerous” fiscal outlook for the country, BNP Paribas SA said.
Polish bonds weakened and the zloty fell after investors bought just over half the five-year notes on offer from the Finance Ministry yesterday in the first auction since the government said the budget deficit will almost double next year.
All (slight) sarcasm aside, I would count this as a troubling sign from the periphery; an indication that perhaps difficulty is headed towards the center. For new members, I’ve written about this concept (here) and dedicated a podcast to it (here).
by former_user