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In the Name of God بسم الله

American municipalities buying Israeli debt

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How Americans fund the war effort

And many likely don't even know

  • Local governments in Florida, Indiana and Ohio have been enthusiastic buyers
  • The overseer of a Floridan county gets standing ovations in public meetings for his stance. US$700m out of his $4.6bn overall portfolio is in Israel bonds
  • The bonds are difficult to sell and designed to be held to maturity
  • Demand driven by political considerations, low perceived risk and better yields than US Treasuries
  • Florida state law (like some others) puts Israel bonds on a par with US government debt, no other country has this allowance
  • Jewish Voice for Peace had led protests against the bonds

https://www.ft.com/content/a9a01ac6-92f7-452a-a75c-7ac212f6a7ae

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Worth remembering that one of the instances when the debt may not be repaid is if the State of Israel, as currently constituted, ceases to exist.

So we could end up in a situation where the United States has a debt problem if that event were to come to pass. And the US, therefore, has a strong financial incentive to make sure that it does not come to pass.

If in the remote possibility that it does come to pass another way of looking at this debt issuance is that it is a 'poison pill' for any entities that may wish to displace Israel. If they do so, the US will make it clear that it wants the debts to be repaid and that would be too expensive.

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