Today, the UK gilt market is under great stress. The 30-year UK bond yield has spiked to 5.6 percent, a level last seen in 2008. That makes it comfortably the highest government bond yield among the G-7 countries.
This makes us wonder whether the unfolding of yet another United Kingdom bond market crisis might be an early warning sign for other countries with unsustainable public finances and serious political constraints.
In particular, we have to wonder whether it might be an early warning signal for the United States that has worse public finance fundamentals than the UK and that might be on its way to another period of political gridlock.
Andrzej Rostek/iStock via Getty Images
In 1998, the Thai currency crisis quickly spread to other Asian countries with weak balance of payments situations. That led to the Asian currency crisis that shook world financial markets. In 2010, the Greek sovereign debt crisis soon
