Wealth
Wealth

BACK in the days of the gold standard, central bankers were very concerned about the views of international investors. They believed that maintaining the value of their currencies would reassure creditors. That is why they were so resistant to the idea of floating currencies. Georges Bonnet, a French finance minister, put it best

Who would be prepared to lend with the fear of being paid in depreciated currencies always before his eyes?

This fear still shows up from time to time. Under the old exchange rate mechanism, countries like Italy would undergo periodic devaluations to restore their competitiveness*. As a result, investors would demand a higher bond yield to compensate for this risk. When the single currency was planned, bond yields slowly converged on the German level as the risk of devaluation disappeared. It popped up again in 2011 and 2012 as investors feared some countries might drop out of the euro and reintroduce domestic currencies; that would have required a partial default.

EARLIER this month a woman arrived at O’Hare International Airport in Chicago without a ticket, boarding pass, or passport and flew to London. Prosecutors claim she did this by sneaking past officials from the Transportation Security Administration, a government agency responsible for airport security, while they were inspecting other travellers’ boarding passes. She was briefly thwarted when she tried to do the same thing at the boarding gate for a flight to Connecticut. But the gate agent caught her and asked her to sit down. After spending the night in the airport, she took the shuttle to the international terminal—again without the required boarding pass and passport—and got on a British Airways flight to Heathrow, where she was arrested on arrival.

The woman, 66-year-old Marilyn Hartman of Illinois, has done this before. In fact, she has been convicted of criminal trespassing at O’Hare four times over the past few years. Ms Hartman’s lawyers have attributed her behaviour to mental-health issues.

CHICAGO (Reuters) – With Illinois’ political and fiscal problems showing no sign of abating, investors on Thursday demanded fat yields for the low-rated state’s $1.3 billion of general obligation…