There has been much discussion in the financial press about the “bubble” in U.S. Treasuries. The chart above shows the U.S. 10‐Year Treasury Bond with the highest yield (2.455%) or lowest price when compared to similar 10‐year treasury bonds issued by Germany (.927%), Italy (2.251%) and Spain (2.035%). The U.S. 10‐Year Treasury Bond has an extraordinarily large yield compared to the German 10‐Year Treasury Bond, while Spain and Italy have marginally lower yields. On a relative basis, U.S. Treasuries are the cheapest in price, particularly when considering our historically sound credit quality in comparison to that of Italy and Spain. Although one can argue that all sovereign debt is in a price bubble, it can be said that U.S. Treasury debt is cheaper than that of most of the G10 countries.

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