Why does the market sell off the national debt of the euro zone countries, which will increase its yield?

The rise in yield refers to the decline in the price of government bonds. The national debt fell because investors were worried that those countries could not repay their debts and interest, and they would sell a lot of national debt. If they sell more, if they buy less, their prices will fall. Just like buying and selling watermelons, there are few watermelons just listed, and things are rare and expensive. After a large number of listed, the weather is cold, fewer people eat, the price fell.

National debt can be listed and traded, and the transaction has a price; It is the same as the rise and fall of stock prices; However, after the maturity of the national debt, it is still exchanged at the face value at the time of issuance.

Once the national debt is issued, the interest rate is fixed. If there is a serious deficit in the economic downturn of the country that issued the national debt, then investors will doubt the country's ability to repay the national debt, and they will throw away the national debt. The more people sell, the lower the price naturally.

The price of national debt is negatively correlated with the yield of national debt. For example, a national debt, the annual interest income 100 yuan, 2 yuan, then its yield is 2%; If investors are worried about risks or in order to get more income, then all those who hold such bonds will sell their bonds. More people sell, fewer people buy, and prices fall, becoming 90 yuan. If you buy a national debt with a face value of 100 yuan in 90 yuan now, the yield after maturity is 100-90 = 65438+, except the interest of 2 yuan. Then the yield is (10+2)/90 *100% =13.33%, that is, the transaction price decreases and the yield increases.

A country will not go bankrupt because it is not an enterprise or a company. It does not produce and sell products, is not responsible to shareholders and does not need to borrow money from banks. It has an army, a central bank that issues currency and prints money at any time. That court can put the head of the national government in prison, so who do you think will force you to go bankrupt? Bankruptcy here refers to the financial bankruptcy of a country, that is, it is unable to repay and pay because it cannot make ends meet, and it owes a lot of foreign debts. As long as he borrows money from the International Monetary Fund or other countries; Negotiating with creditors for debt relief can tide over the difficulties; Greece, for example, will cut government spending to meet the requirements of the European Union and the International Monetary Fund, then lend it to it, and then negotiate with creditors (banks holding Greek government bonds) to reduce their debts by 50%, so as not to go bankrupt.

Issuing money and borrowing money from abroad are two different things. Debt is money owed to investors by the Ministry of Finance. The central bank issues currency, which are two concepts; Change the dynasty to change the currency.

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