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Risk in this context means uncertainty - since the government can print money it is always able to pay its debts. You might not get a great return on your inves
by proteal 4y ago
Risk in this context means uncertainty - since the government can print money it is always able to pay its debts. You might not get a great return on your investment, but the government always has the capability to pay you back. There’s little reward with no risk.
- TekMol 4y agoI disagree. When I lend 2022 dollars to the government, I give away a certain amount of buying power. I don't know if I will get that buying power back when I get my 2032 dollars. The government does not always have the capability to pay me back my buying power. It cannot create value at will. It can create money at will. But the more money it creates, the less value it has. So it cannot create value at will.
- sumofproducts 4y ago"Risk" in this context generally refers to default risk, not the chances that the opportunity cost of your T-bill'd money exceeds the return.
- quintushoratius 4y agoGovernments are not the only source of bonds. 10-year securities are not the only denomination.
- oneoff786 4y agoYou don’t disagree, you just don’t understand basic financial terminology