Government bond interest rate chart,key to economic future

[patslatt]

See Bloomberg chart on Irish government ten year bond yields and a similar chart for German government bonds. Bloomberg.com: Personal Finance

If the interest rate on Irish bonds rise from just above 5% now to,say, 8% junk bond yields at a time when Ireland is experiencing deflation of maybe 2% a year,real interest rates would be 10%. Government borrowing would soon become impossible,triggering an economic depression with unemployment of around 20% likely.

[bormotello]

If the interest rate on Irish bonds rise from just above 5% now to,say, 8% junk bond yields at a time when Ireland is experiencing deflation of maybe 2% a year,real interest rates would be 10%. Government borrowing would soon become impossible,triggering an economic depression with unemployment of around 20% likely.

It was a last hope that PS will manage to keep their high salaries
Now they have only one choice – reduce their salaries voluntary by 50%, otherwise IMF will be single source of their income

[BodyofEvidence]

It was a last hope that PS will manage to keep their high salaries
Now they have only one choice – reduce their salaries voluntary by 50%, otherwise IMF will be single source of their income

that post, apart from being logically and economically weak, is feck all to do with Patslatts post (which itself was odd)

[feargach]

See Bloomberg chart on Irish government ten year bond yields and a similar chart for German government bonds. Bloomberg.com: Personal Finance

If the interest rate on Irish bonds rise from just above 5% now to,say, 8% junk bond yields at a time when Ireland is experiencing deflation of maybe 2% a year,real interest rates would be 10%. Government borrowing would soon become impossible,triggering an economic depression with unemployment of around 20% likely.

What is your time horizon for "soon"? 3 years? 50?

Or is it your point that it is impossible to borrow money at, say, 8% interest?

If you accept that it is possible to borrow at 8%, what IS the ceiling you believe Ireland will hit at which borrowing is impossible? I'd like you to aim for one decimal place please, but if you can't I'll accept anything within the nearest 0.5%? Clearly you know this stuff rather well.

Also, are you blind to the trend?

Since January (it's May now) it has briefly peaked twice in a jittery market. In two peaks, the second mower than the first, it has gone above 5.85 on only six days since January.

It has not been over 5.75 since March 18th.
It has not been over 5.42 since April 2nd.
It has not been over 5.35 since April 17th.
It has not been over 5.16 since May 4th.

Seeing the pattern yet?

[bormotello]

What is your time horizon for "soon"? 3 years? 50?

Or is it your point that it is impossible to borrow money at, say, 8% interest?

If you accept that it is possible to borrow at 8%, what IS the ceiling you believe Ireland will hit at which borrowing is impossible? I'd like you to aim for one decimal place please, but if you can't I'll accept anything within the nearest 0.5%? Clearly you know this stuff rather well.

Also, are you blind to the trend?

Since January (it's May now) it has briefly peaked twice in a jittery market. In two peaks, the second mower than the first, it has gone above 5.85 on only six days since January.

It has not been over 5.75 since March 18th.
It has not been over 5.42 since April 2nd.
It has not been over 5.35 since April 17th.
It has not been over 5.16 since May 4th.

Seeing the pattern yet?

Nobody got May’09 payslips yet
As soon as investors will see results of damages done by new budget, they can reconsider their position

[patslatt]

What is your time horizon for "soon"? 3 years? 50?

Or is it your point that it is impossible to borrow money at, say, 8% interest?

If you accept that it is possible to borrow at 8%, what IS the ceiling you believe Ireland will hit at which borrowing is impossible? I'd like you to aim for one decimal place please, but if you can't I'll accept anything within the nearest 0.5%? Clearly you know this stuff rather well.

Also, are you blind to the trend?

Since January (it's May now) it has briefly peaked twice in a jittery market. In two peaks, the second mower than the first, it has gone above 5.85 on only six days since January.

It has not been over 5.75 since March 18th.
It has not been over 5.42 since April 2nd.
It has not been over 5.35 since April 17th.
It has not been over 5.16 since May 4th.

Seeing the pattern yet?

The trend is down but it is grasping at straws to think 5% interest rates are remotely reasonable with deflation running at 2%,hence real interest rates of 7%. This is an indicator of severe market distrust in the bonds.Trends can reverse easily too,given that most price movements in financial market follow a bell curve (Fama) and are random.

Borrowing at 8% with deflation at 2% is possible but potentially ruinous as borrowing mushrooms. Over ten years to maturity on 10 billion in bonds,the interest accumulates to €8 billion. At a reasonable borrowing rate of 3.5%,the interest would accumulate to €3.5 billion,€4.5 billion less. Remember how difficult it was for the government to save €2 billion in the recent emergency budget?