Look for rebels to make miraculous strides towards toppling the government, should this tone continue.
First S. Korea, now Nigeria. The banking system is owned by Anglo-American interests. The Chinese interfering in the affairs of the King makers cannot be a good development for world peace.
The West African nation may shun the Eurobond market, opting instead for renminbi or yen bonds, according to Finance Minister Kemi Adeosun. The government wants to raise as much as $1 billion in international capital markets to finance a deficit that’s forecast to be about 2.2 trillion naira ($11.1 billion) this year, she said April 9.
“We are finding that, indicatively, the renminbi market may be cheaper than the Eurobond market,” Adeosun told reporters in Lagos, the commercial capital. “We are shopping around for the best deals.”
This is very interesting to me. I don’t know why, truth be told.
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Why should we be the only ones lending money to failed states that can never repay? Let the Chinese “invest” here, who cares. Pic says it all.
Please work on your financial background:
1) The denomination of the bonds is does not indicate the investor/buyer of the bonds. If the bond is denominated in USD, that means that th buyers must obtain USD currency to buy the bonds form Nigeria, so that makes the Dollar marginally stronger. If it is denominated in Yuan, that strengthen the Yuan. Strong countries issue bonds in their native currencies, but no foreigners want to be paid back in Nigerian currency that is prne to high inflation.
2) A very small percentage of US gov’t loans and aid are fro purely humanity reasons. Much of the gov’t money eventually flows back to the largest weapons manufacturer of Earth: the US. Also, much of that money is essentially to support moderate gov’t in Pakistan, Iraq, etc. It can be argued that $1 in aid to Muslim countries provide more protection against terrorism than an $1 increase in the DoD budget.
Interesting. Excellent points.
Because African nations have such a great history of fiscal prudence. Perhaps they will start sending out spam emails promoting the deal.
Because Nigeria has a lot of oil.
While the oil revenue may not be direct colleteral for the bonds, the facts that Nigeria will be able to pay off the bonds with the right “leverage” from nations with large armies (both the gun-laden and calucaltor-laden types) does not make the bonds as risky as some others.
Look at what happenned when Argentina tried to default. The US courts (backed by the power of the US banking system) said, “sorry, try again.” They ended up receiving ).$0.75/1.00 when other received $0.30/1.00. Let me rephrase what happened: A sovereign nation was forced by a powerful foreign country to pay more to some of it’s bond holders than it had agreed to with other bond holders. Imagine if the US debt came duue and everybody agreed tp 70% haircuts, but then some Chinese citizens were able to get a better deal because of a rulign of a Chinese court.
Long time ago I was amazed at investment (varied) by Chinese in African market. The only investment I could think of was in the company that owns Tsing Tao (one of my favorite beers; truly medicinal)