[luislezcair]

On Monday they issued 100-year bonds that yield nearly 8% of interest. Huge public debt, desindustrialization of the economy and capitals flowing out of the country are some of the causes that led to the Corralito. This is history repeating itself.

Bus this new law is certainly good news.

[marcosdumay]

They sold a bound at 0.05% of face value? That's an incredibly new kind of low. Why would they ever push for that long term?

[tetraca]

It's a rock and a hard place. They have a deficit, they cannot wring out any more money via taxes, and cutting social spending would likely result in both outrage from the electorate and economic pains due to the policies of the previous administration. So to keep the machine running they're borrowing money, with the hope that pro-business policies will attract the investment needed to be able to make everything ultimately sustainable.

At least, this is how it was explained to me.

[marcosdumay]

It's funny that here at Brazil, every time the government uses this policy we get 1.5-2 years of intense growth, and then a big recession.

The recession always lasts until ~1 year after the government start cutting social spending and stop the pro-growth policies. Then we get moderate growth again, as long as the non-pro-growth is maintained.

Besides, business don't tend to like most policies called "pro-business".

Still what I don't get is why they are selling 100 years bounds at all. The interest rate is quite understandable.