When They Go Lo

14 Oct

The bond ‘spread_ strikes fear and shrugs on Italian streets | Financial Times

A fascinating article in the FT discussing the average Italian citizens awareness of the German/Italian government spread (lo spread).  It is almost unbelievable that the man or woman on the typical Italian street is so cognizant of the state of Governmental finances. Granted, I’m sure that this knowledge probably doesn’t translate into more legal income declaration, but nonetheless one has to give them some credit for at least giving a passing thought to such things. This got us thinking about  how the U.S. is truly blessed in such affairs. As both the worlds largest creditor and the holder of the worlds most active currency of reserve, thoughts of relative borrowing rates, or even absolute borrowing rates, do not cross the mind of the average U.S. citizen. It wasn’t that long ago that the mis-informed, mis-aligned, and misanthropic Tea Partiers were calling for the heads of those spendthrift Democrats. Today, those same budgetary zealots have replaced their fiscal zealotry with concerns about illegal immigration and the deep state. Fiscal issues don’t seem to be a concern with either party as borrowing needs have risen 70% YOY,  so when The Donald talks about rising rates, he should take his usual self-induced bow there also.

 

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