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You realize the yield on a 1 yr US treasury bond is currently 1%, and the yield of it one year ago was 0.1%? And that bonds pay coupons denominated in dollars?

You realize the yield on a 1 yr US treasury bond is currently 1%, and the yield of it one year ago was 0.1%? And that bonds pay coupons denominated in dollars? The savings rate at Bank of America is 0.01% APY. A person has no risk-free ability to save, and is forced to speculate in asset markets just to keep up with inflation.

colinmhayes 5y ago
> The savings rate at Bank of America is 0.01% APY. The government doesn't want you holding large amounts of cash. It causes problems for everyone. > A person has no risk-free ability to save Nothing is risk free. Yes, the government wants to force people to invest their money in order for it to keep its value over long periods of time. Hoarding money is bad. If you don't think T-bonds pay enough you're free to buy other bonds, equities, real estate, even gold if you like it so much.
- scottiebarnes 5y ago
  > The government doesn't want you holding large amounts of cash. Government ownership of the interest rate is part of the problem. In a free market, an interest rate emerges naturally based on the supply of money from savers, and demand of money from consumers. Any individual divides their wealth into either saving or consumption based on their individual time preferences. Some people like stuff now, some people are happy to wait and have more later. Presently, we are forced to consume, or take on riskier assets to save. > Hoarding money is bad. Bonds and savings accounts aren't hoarding money; you loan the money out for other people to use productively, and they pay you an interest rate. > If you don't think T-bonds pay enough you're free to buy other bonds, equities, real estate, even gold if you like it so much. Again, you're failing to see the consequences of t-bonds having a low interest rate and the US dollar being unable to store value. The consequence are volatile and speculative asset markets. If over time no one wants treasury bonds or USD, they become valueless.
- int_19h 5y ago
  The end result is that everybody is an "investor" (mostly by proxy via 401k and pension funds), and that is then used as the trump card to shoot down any regulations that would reign in the insanity that is the modern stock market, by pointing out that any reduction in market profits hurts those "investors".

colinmhayes 5y ago

> The savings rate at Bank of America is 0.01% APY. The government doesn't want you holding large amounts of cash. It causes problems for everyone. > A person has no risk-free ability to save Nothing is risk free. Yes, the government wants to force people to invest their money in order for it to keep its value over long periods of time. Hoarding money is bad. If you don't think T-bonds pay enough you're free to buy other bonds, equities, real estate, even gold if you like it so much.

scottiebarnes 5y ago
> The government doesn't want you holding large amounts of cash. Government ownership of the interest rate is part of the problem. In a free market, an interest rate emerges naturally based on the supply of money from savers, and demand of money from consumers. Any individual divides their wealth into either saving or consumption based on their individual time preferences. Some people like stuff now, some people are happy to wait and have more later. Presently, we are forced to consume, or take on riskier assets to save. > Hoarding money is bad. Bonds and savings accounts aren't hoarding money; you loan the money out for other people to use productively, and they pay you an interest rate. > If you don't think T-bonds pay enough you're free to buy other bonds, equities, real estate, even gold if you like it so much. Again, you're failing to see the consequences of t-bonds having a low interest rate and the US dollar being unable to store value. The consequence are volatile and speculative asset markets. If over time no one wants treasury bonds or USD, they become valueless.
int_19h 5y ago
The end result is that everybody is an "investor" (mostly by proxy via 401k and pension funds), and that is then used as the trump card to shoot down any regulations that would reign in the insanity that is the modern stock market, by pointing out that any reduction in market profits hurts those "investors".