T-bonds at 0% why not just keep the money?

Discussion in 'Economics' started by Archin, Dec 21, 2011.

  1. Archin

    Archin

    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?
     
  2. GTS

    GTS

    Return of principal
     
  3. Holding large quantities of actual cash isn't without cost, either.
     
  4. Archin

    Archin

    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.
     
  5. Maverick74

    Maverick74

    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.
     
  6. 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)...
     
  7. Are you generally supportive of ZIRP or do you think it is more harmful than helpful?
     
  8. It has all sort of costs associated with it, without a doubt. But yeah, I do believe it's appropriate for certain circumstances.
     
  9. Archin

    Archin

    The yield is guaranteed, the appreciation isn't. Some stocks are up over 30%, perhaps they should have gone with those.
     
    #10     Dec 21, 2011