Category: us

In short: Government Bonds Yields Curve.

Lets have a look at some examples right now and how that recently changed.

Lets start with a really strong and healthy economy like Germany. AAA rated by all rating agencies.

Yes, there is a little bit of a bump in the 1 year maturities. But given that the interest rate is actually negative (meaning investors are paying the German state to keep their money save, rather than charging interest), and the outlook is slightly improving, this is a clear indication that nobody is betting on this economy to fail anytime soon.

So how about the United States? AA+ rated by Standard & Poor, AAA by Moody’s and Fitch.

6 moths ago the markets were skeptical, but things look overwhelmingly healthy now that trade wars with China look like they came to an end. People still charge the US government interest to lend them money.

France currently AA rated by Standard & Poor and  Fitch. AA2 by Moody’s, outlook positive.

like Germany, expected to have a few bumpy months ahead, but doing well. Better than the US in fact with a negative interest rate of -0.5%

Okay, I am cherry picking strong economies. So lets look at another major European player not known for doing so well. Like Spain. Only A rated, but outlook positive.

Now look at that, doing very well indeed!

Now lets compare this with the United Kingdom, still an AA rated country, though the outlook is negative

Interest rates are 1% over what other European nations like Spain or France have to pay, 2% over Germany.
Yield curve is inverted at least in the short term and not looking too good in the 30+ yrs long term either.

See what I mean?

And just because the UK news tries to make the economy of Italy and Greece look doomed, here is how they stack up.

Outlook, certainly more positive and healthy than that of the UK.

East European mayors urge EU to bypass governments in disbursing funds

Venice hit by another exceptional high tide; worst week in 150 years

China and France sign deals worth $15 billion during Macron’s visit

Have you heard that net migration into the UK and US is out of control and rising?

It has been falling in the US since 1997 and in the UK since 2007. 

Source: here.

EU redoubles threat to retaliate if U.S. raises auto tariffs

UK not paying Brexit bill would be debt default, French source says

Pentagon warns EU against blocking U.S. companies from defense pact:

Some news outlets spin this as the US being against a joint EU military cooperation.

In reality, the US doesn’t want to see its arms manufacturers excluded from supplying any potential EU defence pact and threads to exclude European manufacturers from US contracts.

Britain’s Conservatives in fourth place in EU election poll, Farage…:

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