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This looks bad but a while back I read that if you put your dollars in t-bills, you actually came out slightly ahead in real terms over the past century. (I thi
by DennisP 5y ago
This looks bad but a while back I read that if you put your dollars in t-bills, you actually came out slightly ahead in real terms over the past century. (I think it was in one of William Bernstein's books.)
T-bills of course are risk-free and arguably just another form of dollars. So don't hold your dollars long-term in the form that's intended for short-term spending.
- reedjosh 5y agoAnd what of wages that don't increase along with the standard of living? The only reason we feel like our standard of living is okay right now is that the economy has grown substantially over the past few hundred years, but our (being peasants) share of it has decreased dramatically.
- paulpauper 5y agoThe duration of a tbill is up to 1 year so this not too surprising
- AuInsect 5y ago“T-bills of course are risk-free” How are you so sure? If its because an American default is unimaginable, then that’s “presentism” - assuming that whats true today will continue to be. If its because the US could just print its obligations, than Id argue that the Tbills are not risk free since one would only get the nominal value back
- csomar 5y ago> If its because the US could just print its obligations, than Id argue that the Tbills are not risk free since one would only get the nominal value back Depends. The US could honor the T-bills owners at the expense of currency holders.
- itake 5y agoInflation is good. We want the dollar value to decrease over time, because it encourages spending. If people keep their dollars (thinking $1 will be worth more tomorrow, than today), then it hurts jobs and growth. Why is this bad?
- imtringued 5y agoBecause people don't like taking short term risk for long term benefit. It's the same thing with climate change. They'd rather do nothing and keep things as they are, even if that is impossible and the problems get worse.
- syockit 5y agoPeople get hungry and need to buy food. Shoes and clothing become worn and eventually need to be replaced (unless if people are willing to put up with decreased quality of life). Eventually people need to spend money, even if it may take longer than when there is inflation.