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This is a loan to the currency issuer so it’s effectively the same risk as holding cash.
by laurencerowe 4y ago
This is a loan to the currency issuer so it’s effectively the same risk as holding cash.
- noxer 4y agoOnly if you ignore the risk of missed opportunities because its not like holding cash its like owning cash but someone else holds it and you can not do anything with it. Beside that its a loan to the gov not the currency issuer which is the Federal Reserve Bank (In the US).
- zinekeller 4y agoWhile you have a point... it's complicated. Selective defaults are already common for companies, so there could be a chance (to emphasise, a miniscule but still-existing chance) that it'll default on this bond while still guaranteeing the value of its currency.
- dubcanada 4y agoI mean it’s safe to say if the government is going to default on a 10k loan there are bigger issues.
- hirako2000 4y agoYes. But these bigger issues, while taking down more than the currency with it do leave certain investment opportunities safe. E.g gold which would likely see opposite trend in value. Perhaps also crypto, cultivable land etc. The refusal to accept governments can (and often have in history) will only make it worse for people when it happens.