Beating The Rush

摘要

When Otis Redding sang "You don't miss your water 'til your well runs dry" he was unlikely to have been thinking of public-debt markets. Yet the song's warning not to take anything for granted is one that sovereign borrowers understand. This year will be a record one for government-bond issuance, and some countries fret that they may be elbowed aside in the rush to the well. America alone will borrow $1.75 trillion in fiscal 2009, according to its draft budget. Rich European countries may need up to $1 trillion to cover their budget deficits and bank bail-outs. Banks hawking state-guaranteed paper only increase the congestion in bond markets.rnAs the only sovereign issuer of the world's reserve currency, America's federal government is first in the queue for savings. The situation is trickier in the euro zone. It has 16 competing sovereign issuers. Angela Merkel, Germany's chancellor, called for countries to co-ordinate their bond issuance after two auctions for German Bunds failed to raise as much money as hoped. The nightmare for Eurocrats is that one of the less creditworthy countries, such as Greece or Ireland, may one day have a similar problem.