Interest rate on US T-bills turns negative

Nervous investors on Tuesday paid for the privilege of owning US government debt, pushing interest rates on three-month Treasury bills to negative levels for the first time in postwar history.

The implied yield for three-month bills briefly traded at negative 0.01 per cent – the first time that has happened since 1940, traders said. At such a level, an investor is essentially paying someone to own the security

www.ft.com...


Wow so you have to pay money to have your money held. This is going to make gold skyrocket in my honest opinion because people arent going to want to put their money in treasuries if they have to pay to keep it there. Is this a sign of things to come?

I don't get it. Is this fresh doom? When does the rioting in the streets happen?

The yields on US gov't bills & bonds are probably the most important thing people should be watching right now.

No, it's not a matter of gold, it's not a matter of paying money to get your money back.

It's a matter of investors pricing in deflation.

The real returns on maturity of the 3mo bills will actually be positive - not too positive, but positive nonetheless - due to deflation.

Check out the 3 year notes. Today's auction produced the lowest yield EVER. 10 year notes are at WWII yield levels. 30 year bonds are at an all time low. Bond buyers are pricing in deflation for what now appears to be between 3-5 years; this deflation will actually cause the real returns on the bonds to be higher than they seem now.

Originally posted by anachryon
The yields on US gov't bills & bonds are probably the most important thing people should be watching right now.

No, it's not a matter of gold, it's not a matter of paying money to get your money back.

It's a matter of investors pricing in deflation.

The real returns on maturity of the 3mo bills will actually be positive - not too positive, but positive nonetheless - due to deflation.

Check out the 3 year notes. Today's auction produced the lowest yield EVER. 10 year notes are at WWII yield levels. 30 year bonds are at an all time low. Bond buyers are pricing in deflation for what now appears to be between 3-5 years; this deflation will actually cause the real returns on the bonds to be higher than they seem now.

Gold is rallying on the sinking bonds though? Hmmmm

Originally posted by mybigunit
Gold is rallying on the sinking bonds though? Hmmmm

The bond yields have been sliding for several weeks now. I mentioned last month that the bond market was telling us about deflation.

Gold isn't something to ignore, but it should not be the only thing one looks at.

IMO this is a way for the government to control the way the 700 billion is spent. They do not want banks to beef their reserves by hoarding the billions of dollars and investing it right back into treasury bonds. They issued the 700 billion to get money flowing again. Which it is not doing right now because banks are putting it in treasury bonds. This will force them to use it.....hopefully

-Kdial1