Friday , 19 April 2024

Where Do U.S. Bonds Rank in Safety Compared to Other Countries? Not 1st, Not 5th, Not 10th, Not 12th, But…

Natixis, the French investment bank and asset manager has determined that the safest country – the country whose bonds are really risk-free – is Sweden, the only one to score a perfect 5. Where do the U.S., Canada, the U.K., Australia and other major countries rank. Take a look.

 So says Matthew Boesler ( in edited excerpts from his recent post*.

Lorimer Wilson, editor of (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Boesler goes on to say, in part:

Natixis considers five criteria it says are necessary for a country’s bond to play a “risk-free” role in an investor’s portfolio, namely:

  1. have sound public finances (be solvent);
  2. not have excessive monetary creation which could result in either an abnormally low level of long-term interest rates in the near future or a risk of inflation in the long term;
  3. not have a chronic external deficit (due to the small size of industry, a chronic problem of competitiveness), which would lead to a balance of payments crisis;
  4. not have excessive private debt, which would lead to a financial and banking crisis;
  5. have sufficient potential growth to carry the debt.
Here is their ranking of past and present countries with perceived safe-haven statuses based on the five criteria:
Safe haven countries

Source: Natixis

Notice that the safest country, according to Natixis – the only one to score a perfect 5  is Sweden, and the only country with a 4 score is Norway.

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Canada, Germany, Denmark, Switzerland, and Australia all scored 3 out of 5, while Italy, the Netherlands, Austria, Belgium, and Japan scored 2 out of 5.

Rounding out the bottom with 1 scores are the U.S., the U.K., and France, while Spain and Finland got zeroes.

*  (To access the above article please copy the URL and paste it into your browser.)

Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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