i, ezra klein, am about to attempt something death defying, i m going to attempt something that to my knowledge has never been done in primetime television, i m going the try to convince you in less than two minutes that you should care, really truly care if spanish bond percents are at the right percent. what are they, a bond is what governments use to borrow money. you want money, you sell a bond. the yield is the percent that the government gets on the loan. the more confident a country is that they will be able to pay it back, the less you have to pay to borrow, so we pay just about nothing. a country like spain is considered less of a safe bet so they pay more. a lot bhor. but here is the thing, most
nothing. a country like spain is considered less of a safe bet so they pay more. a lot bhor. but here is the thing, most countries print their own currency. so even if they are irresponsible, they print more money and pay down debts, but that can lead to inflation, and a bit of that is better than defaulting all together. but now spain is part of the euro, they do not control their money anymore, and because investors are worried about the future of europe, they are charging spain higher and higher interest rates. at 7% they are going to default and if they default, they are out of the euro and then if they are out of the euro, the global economy will collapse. that is why you are hearing that the euro yields are important.