The complete history of German bond yields, from Napoleon to Angela Merkel

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Any given day in the global bond market can be fairly snooze-worthy. Bond yields tick up by a few basis points, and down by a few basis points. Ho-hum. That’s the case today in the market for German government bonds (known as bunds). Yields on the 10-year bund declined by about four basis points, or 0.04 percentage points, to 1.12%. In other words, low.
But in my experience, the best way to make sense of

But there’s more. We grabbed estimates of long-term bund yields from data provider Global Financial Data. With the best numbers we have going back to 1815, these are the lowest German bond yields on record. Pretty remarkable.

Now, it’s best to think of these numbers as a broad estimate of interest rates. The benchmark 10-year bund that hit a low today didn’t exist 200 years ago, not least because Germany as we know it today didn’t exist 200 years ago.
Back in 1815, the dominant power in the confederation of German-speaking states, formed that year after the final defeat of Napoleon Bonaparte at
At any rate, if you’re going to have long-term data series like this in the world of fixed income, a certain amount of stitching and pasting is required.
Also, cutting. You may have noticed the odd gap in the graph around 1920. That’s because I axed the yield data around the hyperinflation of 1922-23, which rendered Germany’s bonds worthless. And it’s not just me. The irreplaceable survey of
The government held yields steady throughout the war years. After the war, yields on West German bonds rose, along with those of most advanced economies (although apples-to-apples comparisons are impossible because of various changes to how the bonds were taxed).
German yields most recently spiked in the 1990s around the time of the reunification. But since then, it’s been pretty much a one-way ride to the record low levels we see today.
OTHER GERMAN GOLD BOND
1. German External Loan 7% 1924 (Dawes)
2. German Reich 5% External Loan of 1930 (Kreuger Loan) Fifty Year Gold Bonds
3 German Government International 5 1/2% Loan of 1930 (Young)
4. Free State of Prussia 6 1/2% Sinking Fund Gold Bonds-External Loan of 1926
5. Free State of Prussia 6% Sinking Fund Gold Bonds-External Loan of 1927
6. General Electric Company 7% Twenty-Year Sinking Fund Gold Debentures 1925
7. General Electric Company 6 1/2% Fifteen-Year Sinking Fund Gold Debentures 1925
8. General Electric Company 6% Twenty-Year Sinking Fund Gold Debentures 1928
9. Bavarian Palatinate Consolidated Cities 7% External Serial Gold Bonds 1926
10. Free State of Bavaria 6 1/2% Serial Gold Bonds 1925
11. Free State of Bavaria 6 1/2% External Twenty Year Sinking Fund Gold Bonds 1925
12. City of Berlin 6 1/2%
13. City of Berlin 6 %
14. Consolidated Hydro-Electric Works of Upper Wurttemberg 7% First Mortgage Thirty-Year Sinking Fund Gold Bonds 1926
15. Brown Coal Industrial Corporation 6 1/2% Sinking Fund Mortgage Gold Bonds Series A 1928
16 State of Bremen 7% Ten Year External Loan Gold Bonds 1925
17 Protestant Church in Germany Welfare Institutions Loan 7% Twenty Year Secured Sinking Fund Gold Bonds 1926
18 German Atlantic Cable Company 7% First Mortgage Twenty-Year Sinking Fund Gold Dollar Bonds 1925
19 Central Bank of German State & Provincial Banks, Inc. 6% First Mortgage Secured Gold Sinking Fund Bonds Series A 1927
20 Central Bank of German State & Provincial Banks, Inc. 6% Mortgage Secured Gold Sinking Fund Bonds Series B 1927
21 German Provincial and Communal Banks Consolidated Agricultural Loan 6 1/2% Secured Sinking Fund Gold Bonds Series A 1928
22 German Central Bank for Agriculture 7% First Lien Gold Farm Loan Sinking Fund Bonds 1925
23 German Central Bank for Agriculture 6% Farm Loan Secured Gold Sinking Fund Bonds 1927
24 German Central Bank for Agriculture 6% Farm Loan Secured Gold Sinking Fund Bonds Second Series of 1927
25 German Central Bank for Agriculture 6% Farm Loan Secured Gold Sinking Fund Bonds Series A of 1928
26 German Consolidated Municipal Loan 7% Sinking Fund Secured Gold Bonds 1926
27 German Consolidated Municipal Loan 6% Sinking Fund Secured Gold Bonds 1927
28 Dortmund Municipal Utilities 6 1/2% Twenty Year Dinking Fund Mortgage Gold Bonds 1928
29 City of Duesseldorf 7% External Series Gold Bonds 1925
30 City of Duisburg 7% Serial Gold Bonds 1925
31 Unterelbe Power & Light Company 6% Twenty Five Year Sinking Fund Mortgage Gold Bonds Series A 1928
32 Electric Power Corporation 6 1/2% First Mortgage Sinking Fund Gold Bonds 1925
33 Electric Power Corporation 6 1/2% First Mortgage Sinking Fund Gold Bonds 1928
34 City of Frankfort-on-Main 7% Serial Gold Bonds External Loan of 1925
35 City of Frankfort-on-Main 6 1/2% Twenty-Five Year Sinking Fund Gold Bonds Municipal External Loan of 1928
36 Municipal Gas & Electric Corporation of Recklinghausen 7% First Mortgage Twenty-Year Sinking Fund Gold Bonds 1927
37 Roman Catholic Church in Bavaria 6 1/2% Twenty-Year Sinking Fund Gold Bonds Series A 1926
38 Berlin Electric Elevated and Underground Railways Company 6 1/2% Thirty YEar First Mortgage Sinking Fund Gold Bonds 1926
39 Gesfurel 6% Sinking Fund Gold Debentures 1927
40 Mannheim and Palatinate Electric Companies 7%
41 Good Hope Steel and Iron 7% Twenty Year Sinking Fund Mortgage Gold Bonds 1925
42 Hamburg Elevated Underground and Street Railways 5 1/2% Ten Year Gold Loan 1928
43 State of Hamburg 6% Twenty Year Gold Bonds 1926
44 City of Hanover 7% Ten Year External Convertible Gold Bonds 1929
45 City of Hanover 7% External Sinking Fund Gold Bon
46
47 Province of Hanover Harz
48 Province of Hanover Harz
49
50 City of C
51 Koholyt Corporation 6 1/2% First (Closed) Mortgage Sinking Fund Gold Bonds 1928
52 Municipal Bank of the State of Hessen 7% Serial Gold Bonds 1925
53 Luneburg Power, Light and Waterworks, Ltd. 7% First Mortgage Twenty Year Sinking Fund Gold Bonds 1928
54 Mansfeld Mining and Smelting Company 7% Fifteen-Year (closed) Mortgage Sinking Fund Gold Bonds 1926
55
56 City of Munich 7% Serial Gold Bonds 1925
57 North German Lloyd Bremen 6% Twenty Year Sinking Fund Gold Bonds 1927
58 City of Nuremberg 6% External Twenty-Five Year Sinking Fund Gold Bonds 1927
59 Oberpfalz Electric Power Corp 7% First Mortgage Sinking Fund Gold Bonds 1926
60 Free State of Oldenburg 7% External Serial Gold Bonds
61 Prussian Electric Company 6% Sinking Fund Gold Debentures 1929
62 Rheinelbe Union 7% Twenty-Year Sinking Fund Mortgage Gold Bonds 1926
63 Rhine Westphalia Electric Power Corp 7% Direct Mortgage Gold Bonds 1925
64 Rhine Westphalia Electric Power Corp 6% Consolidated Mortgage Gold Bonds 1928
65 Rhine Westphalia Electric Power Corp 6% Consolidated Mortgage Gold Bonds 1930
66 Rhine Main-Danube Corp 7% Sinking Fund Gold Debentures Series A 1925
67 Roman Catholic Church Welfare Institutions in Germany 7% Twenty-Year Secured Sinking Fund Gold Bonds Series A 1926
68 Ruhr Chemical Corporation 6% Sinking Fund Mortgage Bonds 1928
69 Ruhr Gas Corporation 6 1/2% Secured Sinking Fund Bonds Series A 1928
70 Ruhr Housing Corporation 6 1/2% First Mortgage Sinking Fund Bonds 1928
71 Leonhard Tietz, Inc. 7 1/2% Twenty-Year Mortgage Gold Bonds 1926
72 Consolidated Municipalities of Baden 7% External Sinking Fund Gold Bonds 1926
73 Westphalia United Electric Power Corporation 6% First Mortgage Sinking Fund Gold Bonds Series A 1928
74 United Industrial Corporation 6% Hydro-Electric (closed) Mortgage Sinking Fund Gold Bonds 1925
75 United Industrial Corporation 6 1/2% Sinking Fund Gold Debentures 1926
76 United Steel Works Corporation 6 1/2% 25 Year Sinking
77 United Steel Works Corporation 6 1/2% 25 Year Sinking Fund Mortgage Gold Bonds Series C 1926
78 United Steel Works Corporation 6 1/2% 20 Year Sinking Fund Debentures Series A 1927
79 Vesten Electric Railways Company 7% First Mortgage Twenty Year Sinking Fund Gold Bonds 1927
80 Rhine-Ruhr Water Service Union 6% Twenty-Five Year Sinking Fund External Gold Debentures 1928
81 Housing and Realty Improvement Company 7% First (Closed) Mortgage Twenty Year Sinking Fund Gold Bonds 1926
82 State of Wurttemberg Consolidated Municipal External Loan 7% Serial Gold Bonds 1925
83 City of Heidelberg 7 1/2% External Twenty-Five Year Sinking Fund Gold Bonds 1925
84 Siemens & Halske Stock Corp. 6 1/2% Twenty Five Year Sinking Fund Gold Debenture 1926
85 Siemens & Halske Stock Corp. 6% Participating Debenture Series A 1930
The end of the 19th and the beginning of the 20th-century associates with the time of expansion in demand, the growth of the production capacity and the rise of exports to Germany. This in its turn stimulated the foreign direct investments (FDI) into the economics. Ten countries were considered the major investors, namely: Austria-Hungary, the UK, followed by France, USA, Italy, Russia, Poland (was a part of neighbouring empires), Switzerland, Netherlands, and Czechoslovakia (as a part of Austria-Hungary). Their aim was to get via FDI the access to raw material and to get involved
Early 20th century
The merger of four major firms into the Vereinigte Stahlwerke (United Steel Works) in 1926 was modelled on the U.S. Steel corporation in the U.S. The goal was to move beyond the limitations of the old cartel system by incorporating advances simultaneously inside a single corporation. The new company emphasized rationalization of management structures and modernization of the technology; it employed a multi-divisional structure and used return on investment as its measure of success.
By 1913 American and German exports dominated the world steel market, as Britain slipped to third place.
In machinery, iron and steel and other industries, German firms avoided cut-throat competition and instead relied on trade associations. Germany was a world leader because of its prevailing "corporatist mentality", its strong bureaucratic tradition, and the encouragement of the government. These associations regulated competition and allowed small firms to function in the shadow of much larger companies.