The Economist.
Hello, Alice Fullwood here, co-host of Money Talks, our weekly podcast on markets, the economy and business.
Welcome to Editor's Picks.
You're about to hear an article from the latest edition of The Economist.
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Finance does not offer many sure bets.
One for the past few decades has been that most rich world sovereign bonds are safe.
Those lending cash to all but the diciest governments could feel confident they would get it back,
plus interest, at a rate set by a free market and without the principal being inflated away.
Bonds also helpfully offset the volatility of stocks by gaining value during recessions.
Today, as public debts mount, all that is under threat.
Since 2000, net government debt in America and Britain has tripled as a share of GDP.
In France and Japan, it has doubled.
The pile keeps growing.
Seldom outside wartime or recessions have rich wealth deficits been higher than they are today.
In the 2010s, when borrowing was cheap, even big debts looked manageable.
Today, yields are high and rising fast, most recently in response to the expectation
that the war in Iran will force up interest rates.
Sure enough, on September 16th, the Federal Reserve raised rates,
becoming the fifth major rich World Central Bank to do so this year.