Tuesday, June 29, 2010

Of 10 year bond rates.

I think it's worth noting, China's 10 year bond rate is 3.40%, while the US' rate is 3.11%, Finland's is 2.89%, and Ireland is 5.52%.

Why include these four countries? Because China holds a large bulk of our bonds and did not have a negative GDP during the global recession, so it's interesting to note that investors trust the US over China.

Ireland, as I have previously mentioned, passed austerity measures 2 years ago in rapid response to their growing deficit spending as a percentage of GDP (which was also plunging). Meanwhile, Finland has been loathe to enact deficit spending measures, even while the European Union has told it that it must control debt and spending. If there was a nation under greater financial duress than the US, it most certainly is Finland. Yet by this measure of confidence, Finland's bond rate is lower than China, the US and Ireland.

Now how remarkable is that? No threat of default for Finland and the US, even while calls to halt deficit spending in a time of great need, has become the rallying cry.

rates can be found here

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