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High bond yields challenge “Pax Americana”

 LONDON, Nov 6 (Reuters Breakingviews) - There are many reasons for dysfunction in the American political system. There are also many reasons why “Pax Americana” – the period of U.S. dominance since World War Two - is under stress. But the end of the era of free money is a new toxic ingredient in the witches' cauldron that links domestic political conflict and Washington’s struggle to rise to a host of global challenges.

The combination of high bond yields with a large fiscal deficit and rising sovereign debt is making it harder for politicians to govern the country. Witness President Joe Biden’s battle to get Congress to approve $106 billion in military aid for Israel and Ukraine, as well as cash to push back against China in the Indo-Pacific.

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