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This is actually a very interesting question. Normally, the answer would be yes. If you take two bonds within a sector (in this case, sovereign debt), and compare yields, the lower yielding bond would generally indicate a security of less risk.
But in this case, no. In the first place, while the two bonds represent sovereign debt from similar developed economies, they are not completely equal. America issues its own currency, but Germany no longer does. So they are not completely comparable in terms of sovereign debt. The other issue here is that the float of German debt is not comparable to US debt. In other words, there is a lot less debt available for investors interesting in owning German paper. Yet there are many German institutional investors who by law must own German debt, which is not true in the US. So there is demand for German debt that defies normal supply and demand calculations. At the same time, the European Central Bank, which issues Germany’s currency, the euro, is conducting quantitative easing operations. That means that there is central bank pressure on German yields, which is no longer the case in the US.
At the same time, the American economy is far stronger than the European economy, of which Germany is only a component — even if it is the most powerful. Stronger economies generally see higher yields on their sovereign debt.
Combined, these factors explain why US sovereign debt — ie US Treasuries — are yielding higher than comparable German bunds.
But again, that was a pretty good question.
Ecco qui la risposta! Trovata cercando su internet. Il tizio in questione risponde a una domanda similare alla mia, sul perché il bund tedesco renda meno del treasury anche se non è più safe.
La lascio qui per tutti.
Se qualcosa non si sa, non c'è nulla di male a dire "Non lo so"
But in this case, no. In the first place, while the two bonds represent sovereign debt from similar developed economies, they are not completely equal. America issues its own currency, but Germany no longer does. So they are not completely comparable in terms of sovereign debt. The other issue here is that the float of German debt is not comparable to US debt. In other words, there is a lot less debt available for investors interesting in owning German paper. Yet there are many German institutional investors who by law must own German debt, which is not true in the US. So there is demand for German debt that defies normal supply and demand calculations. At the same time, the European Central Bank, which issues Germany’s currency, the euro, is conducting quantitative easing operations. That means that there is central bank pressure on German yields, which is no longer the case in the US.
At the same time, the American economy is far stronger than the European economy, of which Germany is only a component — even if it is the most powerful. Stronger economies generally see higher yields on their sovereign debt.
Combined, these factors explain why US sovereign debt — ie US Treasuries — are yielding higher than comparable German bunds.
But again, that was a pretty good question.
Ecco qui la risposta! Trovata cercando su internet. Il tizio in questione risponde a una domanda similare alla mia, sul perché il bund tedesco renda meno del treasury anche se non è più safe.
La lascio qui per tutti.
Se qualcosa non si sa, non c'è nulla di male a dire "Non lo so"
.
vedi che ora ti torna il resto...
