10/9/13 Head to New Zealand for 4.6% bonds

http://www.marketwatch.com/story/5-countries-whose-bonds-are-safer-than-treasurys-2013-10-09?link=MW_popular Interesting read. I plan to check with Fidelity's Fixed Income department later this week. Excerpts: 'According to the International Monetary Fund (IMF), the U.S. government’s net debt is now 89% of gross domestic product. By contrast, Germany—often thought of as Europe’s most financially sound nation—has net debts of only 56% of GDP. 'But if you want really, really safe, you should look a little further north of there—or a long way south. Scandinavian countries, and the Antipodes, have the best financial picture of all. 'New Zealand’s net debt is just 29% of its economy, and Australia’s is just 13%, according to the IMF. 'Denmark’s debts run to a mere 10% of GDP. But compared with its neighbors it looks positively feckless. The governments of Sweden and Norway are actually sitting on net assets. In other words, their governments’ assets exceed their liabilities. 'Norway has by far the strongest finances on the block. Years ago the country made the remarkably sensible decision not to fritter away the money it made from its oil boom on tax cuts or more spending. Instead it banked the money in a sovereign wealth fund and invested it outside of the country. 'The Norwegian fund isn’t run by Wall Street sharks. It is run by a division of the national post office. They use a simple index approach and invest globally. A spokesman explained to me some time ago that the government is only allowed to spend the “real return” each year—in other words, the investment return minus inflation. 'A 10-year Treasury bond, backed by the full faith and credit of John Boehner, Harry Reid, Ted Cruz and Barack Obama, pays just 2.6% annual interest, or about the same as the predicted rate of inflation over the next 10 years. In other words, your portfolio manager is so impressed by the abilities of Boehner, Reid, Cruz & Co. to work together in a responsible fashion that he is willing to lend them money for 10 years in exchange for absolutely no real gain whatsoever. 'Meanwhile a 10-year bond issued by New Zealand pays 4.6% interest. Australia pays 3.9%, and even Norway pays 3%.'