Why the era of cheap government debt is over

When the world's largest pension fund changes its investment strategy, the financial world pays close attention, especially when it plans to drastically reduce its holdings of US government bonds. According to Reuters, Norway's sovereign wealth fund wants to cut its US bond holdings, which totalled around $215 billion (€186 billion) at the end of June, by $80 billion. Global investors are increasingly viewing the US debt binge with suspicion, especially as the country's national debt surpassed $40 trillion in August. This week, the yield on 30-year US Treasury bonds climbed to nearly 5.4%, the highest level since 2007.