Anyone who followed the economic news this August would have found it hard to miss this warning about debt. ‘Debt concerns’ would have been a more accurate way of putting it, as three specific concerns were coming to the fore at the same time: those regarding US public debt, those concerning the debts and liabilities of the hyperscalers, and finally, mounting concerns about the French public debt… Three different fixed income segments, three very distinct sources of concern, and the first effects are already being felt: pressure on US debt has already triggered a sharp rally in Gold and others assets perceived as “store of value”.
Elsewhere, the effects are still manageable, but watch out… James Carville (a US politician close to Bill Clinton) was spot on; he had witnessed the effects of the 1993 rate hike that would ultimately reshape US fiscal policy. His quote has gone down in history: "I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody." One can only agree and add that the adage applies just as much to the public debt as to the private sector. We are developing these topics in our newsletter
