http://www.bbc.co.uk/news/business-17361330

Well I'd buy one, if I thought I would live to be 150...

Sounds like a good idea. At the moment the UK gets very good interest rates on its bonds as we are seen as much safer than most other European countries. If we can get a long term fixed rate it will save us a fortune in the long run.

I wouldn't buy an ice cream from this government, let alone something long term. Given the huge variation between what they said they would do (and more importantly, wouldn't do) and what they've actually done, why would anyone possibly trust anything they said?

They seem to be making it up as they go along. I think their Bullingdon napkins, on which they scribbled out their plans, has had a bit too much wine spilled on it and the important bits are now illegible.

They seem to be making it up as they go along. I think their Bullingdon napkins, on which they scribbled out their plans, has had a bit too much wine spilled on it and the important bits are now illegible.

Ah, fcuk it. If they are intent on mortgaging the future of my grandchildren and great-grandchildren, I want a piece of the action.

Can I have a 100 year mortgage, at 1%? No? Didn't think so.

I think you guys are missing the point. With our national debt (even before this crisis) the way it work is that we take issue new bonds when it's time to pay off the old ones. We hardly ever pay off any national debt, even in the good times. If we can get a long term one now while the interest rates are low, we won't risk paying more in a few years when a short term one come round for renewal.
Unless you want even more spending cuts so we can actually afford to pay off some debt?

A bond is a contract, if you don't pay you are in default. The tories know this perfectly well sa do you. I think you may be allowing your obviously visceral hatred of an ideological foe to lead you into saying things that rationally you know are absurd.

I can't see there being many takers on an issue with a poop yield, but the BBC is barking up the wrong tree by talking about pension funds etc that are happy enough on the whole with normal 30 year gilts. Sovereign wealth funds would be a more obvious candidate for long term capital like this.

I was partly being flippant but partly not. The fact is governments do things that they shouldn't or in theory aren't allowed to do quite often. They are somewhat, without the intent to pun, a law unto themselves. For a limit period - say a decade - I doubt the chances of that happening are that high, which is why government bonds are considered pretty low risk investments. But for a hundred years? I wouldn't bet a fluff-covered boiled sweet that a government - or, in fact, a large set of governments - won't welch on the deal at any point in that period. I consider the current administration to be unusually untrustworthy and self-serving but I'm eternally sceptical about the trustworthiness of any government let alone, what, 25 consecutive governments. The risk at any time is small, but a long period of exposure multiplies risk.


Indeed.

Jon

Set against that, you should consider what motivates a purchaser to actually buy sovereign bonds. It is a hedge against falling prices for gold and equities.

I'm surprised that the internet is not aflame already with doomsday predictions about 100 year bonds only making sense if you expect a 30 year global downturn. I feel like the internet is letting me down in this thread.