Government bonds, on the other hand, have no covenants.

Interest rates on government bonds were racing upward.

The dam is being funded by government bonds and private donations.

Adding cocos to government bonds will require solving a host of technical problems.

As a result, the rating on the Government's recent bond issue has been upgraded.17

Hence, the Fed s intervention in the housing market is really an intervention in the government bond market the purported switch from buying mortgages to buying government bonds is of little significance.

Holders of European government bonds believed that they knew what they had bought.

For example, individual countries government bonds could be replaced by Eurobonds.

This week, such government debt paid around 3.2 , which is very low by historical standards.

At this point, inflationary expectations will increase, long term government bond yields will rise, and the recovery will be crowded out.

European governments are not in a position to instruct the ECB to purchase government bonds.

Bond market vigilantes already have taken aim at Greece, Spain, Portugal, the United Kingdom, Ireland, and Iceland, pushing government bond yields higher.

The proposed crisis mechanism would effectively insure government bond purchasers against the risk of insolvency, but it would entail deductibles that compel bondholders to assume some of the investment risk.

The best policy should categorically exclude bondholders from the set of potential beneficiaries of government bailouts.

Later, the Basel accords whetted banks appetite for more government bonds by ruling them virtually risk free.

The first ever bond issued by a national government was issued by the Bank of England in 1693 to raise money to fund a war against France.

Economists like to subtract the nominal government bond yield from the inflation indexed bond yield of the same maturity to get a market estimate of the inflation rate from now to that maturity date.

The credibility of its pledge depends as much on what it will do (buy unlimited quantities of government bonds) as on what it will not do (buy them from countries that do not fulfill conditionality).

The fundamental benchmark interest rates in modern financial markets are the so called risk free rates on government bonds.

With the government assuming credit risk, mortgages become as safe as government bonds of comparable maturity.

Converting all outstanding government bonds with the exception of Greece s into Eurobonds would be by far the best remedy.

BEIJING Despite shaky economic fundamentals, US government securities are usually regarded as a safe haven.

(Over the course of the euro s first decade, interest rate spreads between ten year government bonds nearly disappeared.)

And countries facing depressions and rapidly weakening inflation typically face very low borrowing costs investors purchase government bonds for want of profitable alternatives.

In response, central banks should purchase government bonds for cash in as large a quantity as needed to push their prices up as high as possible.

Since high risk premiums on government bonds endanger the capital adequacy of banks, half a solution is not enough.

Extending this idea to sovereign debt, government bond covenants could stipulate that if a sovereign s debt GDP ratio exceeds a specified threshold, principal and interest payments to bondholders would be automatically reduced.

Because China s government does not owe much debt to the public, the PBC sold out its holdings of government bonds in 2005.

Meanwhile, rising fiscal deficits in most economies are now pushing up the yields of long term government bonds. Some of the rise in long rates is a necessary correction, as investors are now pricing a global recovery.

Fifth, some argued that highly indebted sovereigns would push investors into gold as government bonds became more risky.

And restructuring weakens banks, which generally hold large portfolios of government bonds, thus making them less able to finance the economy.

Long term government bond yields are already very low, and a further reduction will not significantly change private agents borrowing costs.

French government bond interest rates fell 30 to record lows, less than 50 basis points above German government bond rates.

But this source of market discipline would cease to work if the government s protective umbrella were perceived to extend to bondholders.

By buying government bonds for cash, a central bank can satisfy demand and push down the price of cash.

As soon as economic activity in the United States revives, interest rates on government bonds are liable to shoot up indeed, the yield curve is likely to steepen in anticipation.

The semifinal between Italy and Germany presaged the apparent willingness of Chancellor Angela Merkel to give in to Italian demands for support of the government bond market.

It is also what inspired the European Central Bank to launch an asset purchase program, which has been used to buy Greek and Portuguese government bonds.

As the population ages and shrinks, more people will retire and start selling those government bonds that they are now lapping up.

And, because people trade bonds for commodities, cash, and stocks, the prices of government debt are the rate of inflation, the nominal interest rate, and the level of the stock market.

And this time, the financial mechanisms involved are not highly complex structured financial products, but one of the oldest financial instruments in the world government bonds.

In the US, the interest rate on government bonds now rises from 1.80 at five years to 2.86 for 10 year bonds and 3.70 for 30 year bonds.

Proponents of OMT counter that the Treaty forbids only direct government bond purchases indirect purchases in secondary markets are allowed.

The Battle of the Bonds

When financial markets discovered that supposedly riskless government bonds might be forced into default, they raised risk premiums dramatically.