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>How is holding a bond risk free? No asset is risk free. Bonds are a relatively less risky asset. >The government constantly raises and lowers that scarcity a
by senthil_rajasek 4y ago
>How is holding a bond risk free?
No asset is risk free. Bonds are a relatively less risky asset.
>The government constantly raises and lowers that scarcity at will.
Nope. Notes, Bills, Bonds are auctioned.
- TekMol 4y agoThe FED can buy bonds in an auction at will. Because it prints the money to do so. It's not like the FED goes "Uh oh, those bonds are too expensive for me".
- senthil_rajasek 4y agoIt's a recent phenomenon. During the covid crisis the fed became a buyer of last resort. It's not usual.
- TekMol 4y agoMaybe it's the new normal? Just like doubling the money supply every couple of years seems to be the new normal since it started in 2008?
- senthil_rajasek 4y agoMaybe, but it's not normal today.