全球债券抛售加剧，中国借贷成本逆势下降

In the past couple of days or so, a sell-off in the global bond markets has suddenly accelerated, pushing borrowing costs to multi-deade highs across the world. The one notable exception to this trend, however, has been China, where borrowing costs have actually fallen. So, in this video, we're going to try and figure out why everyone is suddenly going broke and why China bucked the trend. [music] You probably heard that the US dollar is the world's reserve currency, but what does that mean?

Is it still the case? And what does it mean if it's not the case? We've got a multi-page answer in the next issue of our magazine. That's just one of the articles in our longest issue ever. Subscribe to get your copy by clicking the link in the description. So, a good place to start is by looking at the yield on 10-year bonds. That is the annual interest rate the governments have to offer to borrow money for 10 years.

The 10-year bond is sort of in the middle of the range time-wise and what happens in the 10-year market is thus usually a pretty good reflection of what's happening across the market more generally. Anyway, the TLDDR is that yields on 10-year bonds are surging everywhere. In the past 6 months, for instance, the yields on US government bonds, commonly known as treasuries, have risen from about 4% to nearer five. The yield on French bonds, which we did a full video on over on TLDDR EU, has risen from about 3.3% to over four, with Japan and the UK seeing similarly sized rises.

Even the famously creditw worthy Germans haven't been spared with the yield on German bonds rising from about 2.8% to more like 3.2. The notable exception to this trend, however, has been China. In the same time period, the yield on Chinese bonds has actually gone down. It's really quite astonishing how much cheaper it now is for China to borrow than for the rest of the world. The yield on 10-year Chinese bonds currently stands at about 1.6%.

Roughly half of that of Germany and a third of that of the US. So what's going on? Well, let's start by trying to explain why everyone else is currently seeing higher borrowing costs. Now, there are some country specific factors. In France, the looming presidential elections has cemented a pre-existing parliamentary deadlock. Japan is struggling to adjust to the return of inflation and the German economy just sort of seems to be stuck.

But there are also some general factors at play too. Most of these countries are aging relatively stagnant economies with large outstanding debt burdens. There's also the war in Iran which doesn't look to be ending anytime soon and is stoking inflation across the world. This naturally pushes up yields because markets demand more interest to compensate for the fact that the real value of debt is being eroded. Think about it.

If I asked to borrow $100 for 10 years, but you thought that inflation would mean that the same $100 would actually be worth less in 10 years time, you'd demand a higher interest