I was asked to do this one:
Please also look at the glossary entries on bonds, bond markets and bond vigilantes, as well as my View On article on bonds, available here.
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Thank you
Very good.
Of course, I might have done it slightly differently but your approach is correct/ accurate and informative.
This hits the spot for me and glad to see Clive’s input.
…and it was well worth doing, Richard – thank you.
Thanks
It would be good if you could also include a definition of bond yield. I think the term “yield” is first introduced in box 4 without a prior definition? (unless I missed it). Perhaps add one more bullet point in box 3 to define it? That would make the infographic more self contained (e.g. I had to go off and google “bond yield” to remind myself of the definition and make sense of the box 4 comments).
I called it a coupon and said it was an interest rate. I try hard to avoid these issues, but I think most people would get this link.
I posted a link to this in my LP Whatsapp group. I got the following reply:
“I would not argue with the mechanics. The question is the relevance of it. The question is whether you can spend significantly more than you tax without damaging the economy. Whether you call the process ‘borrowing’ or not the crucial issue. I want an economist to explain how the car can be driven well, not how it works under the hood. The implication of what he says is that the government can spend as much as it likes.”
I pointed out that you knew that government spending should always take into account available resources. But maybe infographic should be tweaked to capture that constraint.
One infographic cannot do everything….
Let me do one on the limit of government spending
Thank you Richard for another informative graphic! Does the UK banking system mirror the US system in that sovereign bond issuance has a role to play in managing bank reserves and so indirectly set the short term interest rate?
In essence, yes.