Sovereign bonds
A promise by a government to repay borrowed money on a schedule. The oldest tradable claim on the future.
The invention
The problem. A city-state needed to fund a war faster than it could tax.
Venice compelled wealthy citizens to lend at 5%, issuing transferable claims called prestiti. The compulsion was resented; the transferability was the invention. Once a claim can be sold, its price becomes a daily public verdict on whether the borrower will pay.
Birth and Baptismal Certificate
1782 · The Metropolitan Museum of Art · CC0
"You - help my boy win the war" Buy a Liberty Bond.
1917-01-01 · Library of Congress · Public domain
Where it has failed
Not a list of disasters. A pattern library.
- 1345Florence
Edward III defaults
The English crown repudiated its debts to the Bardi and Peruzzi houses, both of which collapsed.
Sovereigns default when repaying costs more than the reputational damage. This has never stopped being true.
- 1789–1797France
Assignats
Revolutionary France issued debt against confiscated church land, then printed far beyond the collateral. The paper lost nearly all value in eight years.
Backing an obligation with an asset does not help if you issue more claims than the asset covers. The failure is in the ratio.
- 1980–1990Latin America
The lost decade
Mexico's 1982 default triggered a regional crisis. Borrowing in a currency you cannot print turned a rate shock into insolvency.
Currency mismatch is the recurring killer — the same error at national scale as at household scale.
- 2012Greece
The largest restructuring in history
Roughly €200bn of privately held debt written down by more than half, inside a currency union that removed devaluation as an option.
Inside the wealthiest bloc on earth, in living memory, the promise was renegotiated. 'Risk-free' is a modelling convenience.
Where it stands today
You now have the shape. Here is the reading.
Live from public data, pulled at request time. Read it with the failures above in mind — not because a repeat is due, but because knowing the mechanism is what lets you recognise one early.
Treasury average interest rate
U.S. Department of the Treasury
3.71%
Jun 30 · +12.2% y/y
Federal funds rate
Federal Reserve via FRED
No data returned
FRED (St. Louis Fed) needs FRED_API_KEY in your environment. It is free to obtain — see the sources screen for the link.
Federal Reserve via FRED
In your ledger
Sovereign yields set what your savings earn and what your variable debt costs. When the curve moves, your card APR follows within a quarter or two.
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