Investors in Treasury bills are paying for the privilege of lending to the US government as investment safety is given top priority
There is a premium on safety these days. Consumers want to be safe. They run out to buy duct tape and plastic sheeting to protect against biological and chemical attacks, only to learn they might suffocate in their hermetically sealed safe rooms. Investors are so interested in safety they are willing to accept a negative real return. With US consumer price inflation running at 2.6%, energy counts. Treasury bills and notes out to five years reward the investor with nothing. Actually, it is less than nothing. Investors pay for the privilege of lending to the US government, which, even tho...
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