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Any idea what happens when T-Bills go negative as happens in Germany? Do people hoard physical cash or gold?
by frockington1 6y ago
Any idea what happens when T-Bills go negative as happens in Germany? Do people hoard physical cash or gold?
- orange_joe 6y agoI assume you just find rock solid corporate bonds. Apple issues bonds and they have assets far in excess of their debt load + massive profitability. Realistically as an individual you just move into equities. Institutions have different equations. Hoarding physical cash is probably not a good idea, since you have inflation (which probably exceeds the negative rate by quite a bit). It’s worth mentioning that cash holdings in a bank already have negative real growth because inflation exceeds interest (at least in my shitty low interest savings account)
- after_care 6y agoHoarding highly liquid physical assets like gold or paper requires security which costs money. The negative interest rates are cheaper than buying equivalent security.