Re-entry under power. The high school students returned to their establishments this Monday, November 2 with a blocking order. The world of work then marches on Thursday, November 5 against the high cost of living. In addition, France borrows ten years 1.6 points more expensive than Germany. Three Saturdays of processions preceded this week, including that of October 17 and its looting. Then the OAT ended at 5.13% on October 22. Thus, street and market end up in the same table of purchasing power. We had already raised the question of the protection of savings in the face of the French crisis on October 22.
Mobilization of November 5, the world of work after high school students
The call comes from the inter-union CFDT, CGT, FO, Unsa and FSU, launched at the beginning of October. The CFE-CGC and the CFTC have since joined it. Sophie Binet promises on France 2 “a great day of convergence with private sector employees”. She also calls for “a review of the government’s draft budget which, as it stands, is catastrophic for the country”. For its part, Sud Radio summarizes the demands in four points. These are rising wages, preserved public services, protected employment and a better distribution of wealth.
The high school students didn't wait. Ryad Rani, president of the High School Union, first called for general meetings on Monday, November 2. He then called for blockades of high schools “Tuesday, Wednesday, Thursday, Friday and as many as necessary”. On Saturday October 31, Act III of the convergence of struggles brought together 320,000 people according to Interior. The youth inter-union demands 500,000. Two weeks earlier, the day of October 17 ended in looting in Paris and Lyon. Demonstrators also entered the hall of Marseille town hall. Sébastien Lecornu announced 1,200 arrests the same evening, then a toll of 1,800 the next day. Finally, the yellow vests are already promising a “six seven”, Friday November 6 and Saturday November 7.
OAT-Bund spread at 160 points, the cost of living bill for the State
The bond market voted before anyone else. The spread between the French OAT and the ten-year German Bund reached 159.9 basis points on November 2. According to data compiled by Ideal-Investisseur, it was only 102 points on September 22. The peak of 174.6 points dates from October 22, the day the OAT closed at 5.13%. France has not paid this price since July 2002.
This gap has a concrete cost. Emmanuel Moulin, governor of the Bank of France, judged on France Inter on October 7 that “the situation is serious”. Indeed, the finance bill puts the State's interest expense at 91.2 billion euros in 2027. This is 12 billion more than in 2026 (79.2 billion). This amount represents almost 90% of net income tax revenue.
Furthermore, Agence France Trésor must borrow some 310 billion euros in the medium and long term in 2026. Of this volume, each increment of 100 additional basis points costs around 3 billion euros in interest per year. This is an order of magnitude, which only concerns the emissions of a single year. However, this additional cost runs over the entire lifespan of these titles. The cost of living bill then goes down to the households who borrow. Pretto thus notes an average rate of 3.76% over twenty years for November, compared to 3.66% in October. The 4% mark is even crossed for certain profiles.
Savings in the face of the high cost of living, from Livret A to bitcoin
What to do with your money in the face of the high cost of living, when the State borrows at nearly 5%? INSEE estimates October inflation at 3.4% over one year, with energy at +24.1%. However, Livret A serves 1.7%. The gap with inflation costs around 170 euros per year on 10,000 euros of savings. This calculation assumes that prices keep this pace. For their part, euro funds are taking in the rise in rates with a delay. Insurers are in fact replacing securities issued at around 1% with OATs at around 4.9%. Gold remains the refuge reflex, without yield and with its own shocks.
Bitcoin was trading around $76,800 this Tuesday, November 3 around 6 a.m. (Paris time) according to CoinGecko. It comes out of October ending down 7.67%. Over the period, $12.5 billion of leveraged positions were liquidated. Precautionary savings and bitcoin do not play in the same category, and nothing here beats investment advice. However, the question of refuge changes in nature when the risk comes from the balance sheet of the State itself. Public debt has in fact reached 3,615 billion euros, or 119.2% of GDP.
