Quote:
Originally Posted by Hugh
FYI, the yield from UK Government 10 year bonds is just above 2%.
|
Of course what it would be if the BoE hadn't bought the bulk of the issue with created money is a different story.
Since 2008 the government has borrowed over 500bln, the BoE have bought over 60% of it. The government is borrowing from itself, that and that we have our own currency are the only reason the bond yields are low, on the basic economics they should be through the roof given 47% of GDP goes on public spending, more than Sweden or Norway, whlie we only raise about 37% of GDP from taxation.
We may have a higher budget deficit than Portugal, Italy, Greece, Spain or Ireland for this year. I struggle to see what we're doing to earn such a low yield beyond it indicating the desperation of the money markets. That S+P had the nerve to affirm the UK's AAA rating giving Osborne isn't only going to miss his own deficit targets but Alistair Darling's is farcical.