The German 10 year government bond (called a Bund), is offered at a market yield of slightly more than Zero. (0.20%). The U.S. 10 year government bond is offered at a market yield of approximately 1.90 %.
The German Government operates under a balanced budget amendment. This means that their government has very little debt outstanding.
The United States is over $ 30 Trillion in debt and is constantly contemplating adding more.
Does this explain the difference in market yield? And if so, why? And if not, why? (Explain your answer).
Please be brief and keep your answer to a few paragraphs
Testimonials
Bond calculation and short paragraph