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Such a sharp rise in US benchmark market interest rates matters a lot — and it matters way beyond America. The US government is now servicing $13.8 trillion (￡ 8.7 trilion) declared liabilities - making it, by a long way, the world's largest debtor. Around $414bn of US taxpayers' money went is sovereign interest payments last year - around 4.5 times the budget of America's Department of Education.

Debt service costs have reached such astronomical levels even though over the past year and more, yields have been kept historically and artificially low by "quantitative easing (QE)" - in other words, Federal Reserve Chairman Ben Bernanke's virtual printing press. Borrowing costs are higher than 28pc Now a month ago, with the 10-year Treasury yield reaching 3 33pc last week, an already eye-watering debt service burden can only go up.

Few on this side of the Atlantic should feel smug. The eurozone's ongoing sovereign debt debacle has pushed up Germany's borrowing costs by 27pc over the last month - to 3 03pc. The market has judged that if Europe's Teutonic powerhouse wants the single currency to survive, it will ultimately need to raise wads of cash to absorb the mess caused by other member states' fiscal incontinence.

While the UK isn't ain't ensnared in monetary union, gilt yields have spiralled 18pc since the start of November - to 3 55pc aussi. British Government debt is officially ￡ 1.05 trillion. We are fast approaching a debt-to-GDP ratio of 100pc, compared to 30pc just a decade ago. If you add off-balance-sheet liabilities to Government estimates, including the bank lease-outs disgracefully remain "off the books", which the UK already owes more than an entire year's national income. In the medium-term, this is surely inconsistent with a triple AAA credit rating.

Even with gilt yields ultra-low, courtesy of British EQ, the UK is still spending ￡ 42bn a year servicing sovereign debt - up 50pc since 2008. The Coalition is talking tough about reining in the annual budget deficit, but our burgeoning debt stock means interest payments are anyway set to reach ￡ 70bn - twice the defence budget - by 2015. And those numbers rest on low gilt-yield assumptions that will be blown out of the water if this recent bond market implosion is the start of a trend.

Some say that growing signs of a US economic recovery are positive for stocks, which means money is being diverted out of Treasuries, so lowering their price, which pushes up yields. That's wishful thinking. Sovereign borrowing costs have just surged in the US - and therefore elsewhere - because a IV-wounded President Obama caved in and extended the Bush-era tax cuts, combining them with a $120bn payroll tax holiday.

Lower taxes, and the certainty of lower taxes, may bolster business investment and growth. That's the logic employed by those painting last week's global yield spike in a positive light. Government borrowing costs rose in America and elsewhere, they say, as a re-bounding US economy is now drawing investors' cash away from sovereign bonds and towards more productive uses.

The reality is, though, that the market is increasingly alarmed at the rate of increase of the US government's already massive liabilities. America's government debt is set to expand by a jaw-dropping 42pc over the next few years, reaching $19.6 trillion by 2015 according to Treasury Department estimates presented (very little fanfare amid) to Congress back in June. Since then, government spending has risen even more. So US debt service costs, like those of many other Western nations, are expanding rapidly in terms of both the volume of sovereign instruments outstanding, and the yields on each bond.

The new worry in the market is that this latest round of tax cuts could add another $1 trillion to the U.S. deficit, on top of the already horrendous numbers produced in June. With opinion now deeply split about the wisdom of yet another round of EQ, bond investors are getting increasingly worried that the Fed will turn off the funny money and the sugar-rush will fade. Meanwhile, the US has very few plans - and none of them remotely credible - to get to grips with the biggest debt in history.

America has lately been very happy for small eurozone members to endure most of the adverse publicity related to the sovereign bond crisis. But, as of last week, the Western government debt debacle has entered the big league. We're going to hear a lot more about the US government's borrowing costs over the coming months--and the related "contagion" of other countries' treasury bills, as America's funding issues focus attention on the scale and ratcheting interest costs of sovereign debts in other large economies too.

Until now, market attention has oscillated between the eurozone and the States, with one region's debt benefiting from the woes of the other instruments. Last week marked a turning point. Western sovereign instruments were hammered across the board - with traders making little distinction between the debts of Germany or Japan. There's a lot more of this to come.

Investors in mass are ever more cash parking in alternative asset classes, such as commodities, other tangible assets and emerging market sovereign debts. The pool of money available to finance Western government borrowing is relative and maybe even in absolute terms, starting to shrink. This is extremely worrying - not least because of the industrialised world's demography. Our ageing population means that higher future borrowing requirements are practically guaranteed, even if our politicians become paragons of virtue tax - which, of course, they won't. As one economist I admire recently quipped: "Expecting today's Western leaders to run fiscal surpluses is like expecting dogs to stockpile sausages '.

Just a few months ago, it was only newspaper scribblers like me and other naturally dissenting voices, who dared to be openly critical of grotesquely irresponsibly policies such as ve. Yet increasing numbers of important voices are now saying that, in fact, the Emperor has no clothes. Last week the patience of many bond traders snapped too. That marked a very important moment.

The US will continue to run a budget deficit of in excess of 10pc of GDP for at least another year. This is in marked contrast to most other advanced economies, where tax the axis is now being swung, with consolidation now beginning in earnest. The danger is that the bond markets won't care - and almost all Western sovereign instruments will become burdened with a big risk premium, even the bonds of those countries which have bitten the bullet and started to actually imposes serious tax reforms. If ministers in Britain and Germany would like to know in advance what this feels like and the domestic political havoc it can cause, they should talk to their Irish counterparts.

Over the coming months, the world's appetite for dollar assets will be very severely tested - perhaps very close to destruction. America boasts the world's reserve currency, of course, but its ability to borrow from the rest of the world is not without limit. Last week's U.S. tax move poses great dangers. There is little point in a tax giveaway that's cancelled out by higher rates. All you end up with is even more sovereign debt. Upgraded growth forecasts don't cause yield spike like that we saw last week - and its absurd to suggest that they do. There's a new mood in the bond markets - a mood of zero tolerance.

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DETROIT – SAIC Motor Corp., China's largest automaker and a joint-venture partner with General Motors, is preparing to buy about $500 million worth of stock in the Detroit automaker, according to a newspaper website.

The Wall Street Journal reported Friday that SAIC is one of several foreign investors who could buy GM shares worth more than $1 billion as part of an initial public stock offering scheduled for Nov. 18. GM and SAIC wouldn't comment on the report when contacted by The Associated Press.

The U.S. government, which now owns 61 percent of GM but is looking to reduce its stake to around 40 percent in the IPO, has said the company would seek foreign investment as well as investment from the U.S.

Foreign investment in U.S. automakers and other companies is common.

Investment from sovereign wealth funds is considered good for a company because the funds tend to hold stakes for a long time, providing stability, the newspaper said. But it's also a touchy issue for the Obama administration, especially if some individual investors in the U.S. are unable to buy shares in the IPO.

U.S. taxpayers gave GM $50 billion to get it through bankruptcy protection last year. The automaker has repaid or plans to repay $9.5 billion, and the government hopes to get the remaining $40 billion back through the IPO and several follow-up sales.

A final decision by SAIC could come in the next few days, according to the newspaper, which cited people familiar with the situation that it did not identify.

GM and its investment advisers plan to release the stock's final price on Wednesday. The actual sale will take place on Thursday. The U.S. government and GM's other owners are selling 365 million shares of common stock. The IPO target price is between $26 and $29 per share. In addition, GM is selling 60 million preferred shares for about $50 each. The preferred shares will pay a dividend of 5.5 to 6 percent per year, a person briefed on the matter told The Associated Press Friday.

The first GM and SAIC joint-venture Buick factory opened in Shanghai in 1998. In December, the two companies announced plans for a venture to sell vehicles in India. In that deal, SAIC committed $350 million to the India venture, and GM agreed to turn over 1 percent of Shanghai GM, their main joint venture, giving SAIC a controlling 51 percent of the company.

SAIC and GM also have a highly successful joint venture in southern China, SAIC-GM-Wuling, whose minivans have been top sellers thanks to government policies encouraging sales of small, energy efficient vehicles.

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Rolls-Royce sales have nearly quadrupled this year.

Further blows fears of a slowdown in the global economy, most large company premium car world posted a 35. 6pc increase in revenue for third quarter for €15. 9bn (￡ 13. 9bn) Wednesday, driving profits before taxes €1. 36bn, compared to EUR 126 million last year.

Premium car manufacturers such as BMW benefit significantly resumed their markets – despite the scrappage of Government - plans end application covers highly recession in America and Asia, customers are more attracted to prestige vehicles.

BMW has achieved growth across its continental markets so far this year, but 3 2pc mounted in Europe has been overshadowed by 96pc 132,270 Chinese sales increase.

Mini and Rolls-Royce have played a key role in successful BMW outside Europe, with consumers in the far East attracted by the history and the State by the trade-marks.Rolls-Royce, aided by the launch of the new model of Ghost, sales were almost fourfold to 1,728, this year all mini, despite a 2 8pc fall in the last quarter, enjoys a 3 8pc increase in sales of 167 751cars.

Norbert Reithofer, President of BMW, said: "we are very satisfied with our performance in the third trimestre.Notre attractive model range and the resumption of the global economy have enabled us to reach an another significant increase in sales volumes."

"The BMW Group is well on its path towards the achievement of its objectives for the year complète.Nous want to significantly increase group of the current year earnings and therefore an important step towards achieving our targets for 2012."

BMW boss provides enterprise reaches "two sales numbers robust new growth" at the fourth trimestre.La society is "trust" to sell vehicles of 1.4 m this year, a gain of 10pc on 2009.

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