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T-bonds at 0% why not just keep the money?
- Thread starter Archin
- Start date
Quote from Archin:
The yield is guaranteed, the appreciation isn't. Some stocks are up over 30%, perhaps they should have gone with those.
That is an important point...but more importantly I don't know of many people who are looking to lock in on a 30 year at 3% or whatever it was prior to the lift off. Most of the interest is on the short end and those rates are atrocious to say the least. [yeah sure it's wonderful for all those borrowing on depreciating housing].
Of course the byproduct is people will increase duration for that extra 100 basis points or whatever. No f'ing way they get a real return on those bonds even if we somehow just "inflate away" all of our debts via currency devaluation.
As bad as the late 70's were, at least if you had something saved you could get real returns, not this horseshit 0.05% garbage.
Quote from Martinghoul:
It has all sort of costs associated with it, without a doubt. But yeah, I do believe it's appropriate for certain circumstances.
I would agree with it ONLY as an emergency measure with a very finite time horizon. Of course, I think that the skeptics amongst us knew that those "emergency measures" back in 2008 would turn into the status quo and I have no idea how the hell they can raise rates from this artificial zero interest rate policy to something ever marginally realistic.
We're probably just around the corner from more pension blow ups, insurance company bust outs, etc...Anybody else figured out where these guys are getting yield without getting their heads chopped off?
WTF is 0%?
There is no such thing as 0% interest on time. You might as well park it at a bank, or some CDs.
The reason why treasuries yield very little is because of the obvious. Liquidity is being pushed into this asset class. They yield more than a savings account, and most of all, they are liquid.
There is no such thing as 0% interest on time. You might as well park it at a bank, or some CDs.
The reason why treasuries yield very little is because of the obvious. Liquidity is being pushed into this asset class. They yield more than a savings account, and most of all, they are liquid.
But how do you define the length of this acceptable "emergency" period? No matter how you slice it, the West, including the US of A, is undergoing a massive deleveraging. That is not a rapid process by any means.Quote from denner:
I would agree with it ONLY as an emergency measure with a very finite time horizon. Of course, I think that the skeptics amongst us knew that those "emergency measures" back in 2008 would turn into the status quo and I have no idea how the hell they can raise rates from this artificial zero interest rate policy to something ever marginally realistic.
We're probably just around the corner from more pension blow ups, insurance company bust outs, etc...Anybody else figured out where these guys are getting yield without getting their heads chopped off?
As to the pension/insurance issues, that's an entirely different kettle of fish and a complicated question in its own right. However, the US asset mkts are generally large an liquid and I am sure there's stuff that offers adequate returns without forcing people to take stupid risks.