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Global bond yields hit 2008 highs, raising stakes for big borrowers

reuters.com

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Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#11

Post by whateveracct »

pjc50 wrote: post #6

The war(s), especially with the impact on pipelines and the Houthis taking over more of Yemen, are finally affecting fuel prices and hence turning the global economic outlook less positive. You can print money, but you can only ""print"" oil for a short time from reserves, which the US and China have been draining.

Not just reserves, but also all the oil already on ships slowly making its way to its destination. I think I even saw someone predict that around September, the oil issue would get worse due to how slowly those ships move.

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#12

Post by epistasis »

tananaev wrote: post #2

Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.

If you loan the person that prints dollars their own dollars back, there's really zero risk of not getting paid back because they can always print dollars and pay you back. The risk is inflation, same as any currency out there.

I take that back there is a risk they decide to burn trust as someone who doesn't honor deals, which is a new risk that didn't really exist at the nation state level a generation ago...

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#13

Post by andrewmutz »

whatever1 wrote: post #10
tananaev wrote: post #2

Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.

There is 0 risk to getting repaid from the US. We will print for the lenders the exact amount they are promised. Promises kept. All is good

Printing money causes inflation and inflation causes increasing interest rates. It is possible to enter a positive-feedback cycle, and has happened to countries before.

I'm not predicting that this will happen, but we do need to take the debt seriously and not assume we will be able to just print money to get rid of it.

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#14

Post by toomuchtodo »

epistasis wrote: post #12
tananaev wrote: post #2

Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.

If you loan the person that prints dollars their own dollars back, there's really zero risk of not getting paid back because they can always print dollars and pay you back. The risk is inflation, same as any currency out there. I take that back there is a risk they decide to burn trust as someone who doesn't honor deals, which is a new risk that didn't really exist at the nation state level a generation ago...

The debtor inflating the debt away is a soft default, even if not a mechanical "true" default of not making a payment.

Yields will rise and reallocation will occur to hedge against this inflation via debasement risk, as investors will manage against inflation adjusted real return versus other investment opportunities.

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#15

Post by [deleted] »

pjc50 wrote: post #6

The war(s), especially with the impact on pipelines and the Houthis taking over more of Yemen, are finally affecting fuel prices and hence turning the global economic outlook less positive. You can print money, but you can only ""print"" oil for a short time from reserves, which the US and China have been draining.

[deleted]

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#16

Post by nemomarx »

method_capital wrote: post #7
tananaev wrote: post #2

Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.

Working is an interesting term (which I agree with btw) because place like Japan with debt at 200%+ of gdp, rates rising are going to annihilate spending in other important areas. Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?

Eliminate candidates who promise to lower taxes (slows down debt repayment substantially) and those who promise new or expanded services. Who's left? "I'll tax you a little more and not spend that money" is a tough pitch, even if it would be helpful for the debt.

I think Clinton was the last us president to balance the budget and start reducing the deficit so I guess see what he did.

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#17

Post by bradleykingz »

lordnacho wrote: post #8
method_capital wrote: post #7

Earlier quoted context omitted.

Working is an interesting term (which I agree with btw) because place like Japan with debt at 200%+ of gdp, rates rising are going to annihilate spending in other important areas. Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?

> Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly? Who could you vote for, in any democracy, that would fit this? Also, how many voters would have the wherewithal to identify such a person?

conservatives?

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#18

Post by rdm_blackhole »

France is in a dire situation right now.

10y OAT are at 4.5% and rising with almost 100bps difference with Germany and no budget for 2027 since there is no majority in the parliament.

There is also a 6% deficit expected and growth has been revised down to 0.4% although during the first 6 months of 2026 there was actually a decrease of 0.2% of GDP in total so finishing the year in recession is totally possible.

Unemployment could also reach around 9% (15% in real terms if you count the people who have given up and/or been removed from the stats since they ran out of benefits).

Finally gasoline could reach 3 euros/liter (USD $13 per gallon) before the end of the year (already sitting at 2.5 euros/liter in many parts of France right now).

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#20

Post by verelo »

bradleykingz wrote: post #17
lordnacho wrote: post #8

Earlier quoted context omitted.

> Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly? Who could you vote for, in any democracy, that would fit this? Also, how many voters would have the wherewithal to identify such a person?

conservatives?

Is that a joke? Seriously. I don't see any conservative remaining, and it's been a while.
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