You're all idiots. Unless I am
27 Settembre Set 2011 1527 27 settembre 2011

Italy's and America's debt levels

Looking through the IMF's latest World Economic Outlook, I was struck by the forecasts they gave for gross debt/GDP ratios.

Italy is forecast to be at 114% in 2016, down from 121% now, while America rises from 100% to 115%. Europe is forecast to drop to 87% from 89%.

And yet America's 10 year bonds yield 2% against Italy's 5.6%.

Both heading to the same place, but a massive difference in investor perception.

I have to think that if the Italian Government sorts itself out, this crisis could be managed and the debt yields would drop significantly. Or alternatively America is in a lot more trouble than we are led to believe.

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