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> In the U.S., household, corporate and government debt amounted to 239% of gross domestic product in 2014, the Bank for International Settlements estimates, co
by mapgrep 11y ago
> In the U.S., household, corporate and government debt amounted to 239% of gross domestic product in 2014, the Bank for International Settlements estimates, compared with 218% in 2007.
I am not an economist, but it seems to me that if you're going to write an article suggesting that the bond market is "intimidating," "vulnerable as never before," and "increasingly subject to volatility," you would not want to conflate personal credit card debt, junk bonds, and other private debt instruments with what is widely considered the single safest investment in the world, a bulwark of stability in the wake of the economic crisis of 2008 — U.S. Treasury bonds.
Given the spike (now receding) in the U.S. budget deficit since 2000, it seems likely a big portion of this supposedly alarming bond growth is in Treasuries, no?
- jazzyk 11y agoThe only "bulwark of stability" is cold, hard cash. The US government may not default, but that does not mean you will not lose money. If you bought US bonds at a high price/low yield (like right now :-)) chances are you won;t be able to sell before maturity because the price will go down, and if you hold them to maturity, the inflation will eat the measly return US bonds offer right now.