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I mean, the issue is that positive yield bonds exist… like, why is the government just printing money?! The only correct risk-free interest rate is 0%. Wanna r
by tomp 4y ago
I mean, the issue is that positive yield bonds exist… like, why is the government just printing money?!
The only correct risk-free interest rate is 0%. Wanna return? Invest and risk!
- atdrummond 4y agoBonds aren’t risk free. Just asking holders of Argentina’s.
- pjc50 4y agoWell, yes. That's why bonds have a positive and also variable yield. I guess the parent poster doesn't understand the difference between yield and coupon.
- pjc50 4y agosigh Whether the bonds have a positive yield and how currency is issued have no relation. There have been plenty of positive yield bonds during the gold standard. Indeed, "hard money" standards tend to make borrowing at high interest rates more necessary. This is like the bizarre argument sometimes made that hard money will end war; that's not how it works. The war will happen anyway and a means will be found to pay for it. Gold was heavily used as an inter-governmental currency in WW2 - resulting in a few very expensive shipwrecks.