Spain Plunders 90% Of Social Security Fund To Buy Its Own Debt
3 January 2013
, by Tyler Durden (Zero Hedge)http://www.zerohedge.com/news/2013-01-03/spain-plunders-90-social-security-fund-buy-its-own-debtExcerpt:
As the WSJ notes, Spain has been quietly tapping the country’s richest piggy bank, the Social Security Reserve Fund
, as a buyer of last resort for Spanish government bonds - with at least 90% of the €65 billion ($85.7 billion) fund has been invested in increasingly risky Spanish debt.
Of course, this is nothing new, the US (and the Irish) have been using quasi-government entities to fund themselves in a mutually-destructive circle-jerk for years
– the only difference being there are other buyers in the Treasury market, whereas in Spain the marginal buyer is critical to support the sinking ship.
The pensioners sum it up perfectly “We are very worried about this, we just don’t know who’s going to pay for the pensions of those who are younger now,” or those who are older we would add.