Does this mean they expect all other equities to fall in value. Why lend money with no return, is their some advantage over holding it?
This is good. Could you elaborate on the costs? Governments should penalize holding large quantities of cash with a tax as well. This works as a solution to curb government spending on debt repayments.
T-Bonds are making a little more then 0%. They were up over 18% last year. That's not zero huckleberry. The interest might be zero, but the appreciation sure ain't.
http://www.treasurydirect.gov/insti..._20111220_1.pdf Question for the bond specialists: how can there be "anything" alloted at 0.000 ?!
Why not? And yes, bonds at 0% can actually be less costly than holding cash (for example, recently cash yields went a little negative due to the cost of FDIC insurance)...
It has all sort of costs associated with it, without a doubt. But yeah, I do believe it's appropriate for certain circumstances.
The yield is guaranteed, the appreciation isn't. Some stocks are up over 30%, perhaps they should have gone with those.