The yields on US bonds and German bonds will rise at some point in the not too distant future. At that time we will see claims that credit markets are freezing and debt funding is not available to the biggest economies in the world. Those claims will be wrong. In fact credit will be available but the cost of that credit will rise. Last week when the German Government failed to fill a bond auction it did so because it did NOT want to pay a higher price for debt. It was the government’s choice not to take what was offered.for debt. It was the government’s choice not to take what was offered.

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