The yield on the 10-year US Treasury (UST) fell to a low of 0.52% early Friday morning, prompting Deutsche Bank’s chief credit strategist to marvel out loud:
……the current nadir in the 10-year yield went back 234 years, based on data spliced together from the various times the U.S. government has borrowed money in the past.
“The U.S. has been through depressions, deflations, wars, restrictive gold standard regimes, market crashes and many other major events and never before have we seen yields so low back to when the Founding Fathers formed the country,” said Jim Reid, Deutsche Bank’s chief credit strategist, in a Friday note.
There you have it. The lowest government bond yield since the founders were making their way to Philadelphia to draft the nation’s constitution juxta-posed with the most recklessly profligate fiscal policy in its entire history.
And, yes, what passes for fiscal policy in the Imperial City today does give the notion of “reckless” an altogether new definition. And it also tells you why the self-proclaimed “king of debt” currently domiciled in the Oval Office will long be known as the father of America’s fiscal demise.