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Do you think that US treasury bills are not a relatively safe investment? That would be quite a controversial thing to say.
by brl 17y ago
Do you think that US treasury bills are not a relatively safe investment? That would be quite a controversial thing to say.
- daeken 17y agoRelative to what? I'll take precious metals over a fiat currency (any of them) any day.
- brl 17y agoSuit yourself, but the price of gold will go wherever the powers that be want it to go.
- daeken 17y agoErr, this is different from the Treasury how?
- seunosewa 17y agoIf it's not different, then you have no reason to prefer one over the other.
- daeken 17y agoThe difference is that the market controls the price of gold, whereas the Treasury's actions directly control the value of T-bonds and the like. Yes, it's possible to impact the price of gold to an extent, but there's no way anyone can argue the degree of control is even comparable. It just baffles me that you can justify Treasury securities by saying you can artificially control the price of gold.
- brl 17y agoAs it baffles me that you believe the opposite.
- deleted 17y ago[deleted]
- mellis 17y agoSo would many people (especially in today's economic climate), which is why gold is much more expensive than it was in the 80's and 90's (see: http://goldprice.org/30-year-gold-price-history.html http://goldprice.org/30-year-gold-price-history.html). If today's uncertainty subsides, gold could cheapen considerably, inflicting large losses on anyone who invests in it now. Of course, if you think dollars are even riskier than most people do, it may still be worth investing in gold. But not simply because it's not a "fiat currency".
- Luc 17y agoHe's probably referring to inflation reducing the value of a (non-inflation protected) treasury bill investment. Of course they'll honour their obligations, but they may pay using dollars that are worth less.
- daeken 17y agoYes. It's "safe" in that they're likely not going to fold, but they're worthless for maintaining a relatively stable purchasing power.
- steveplace 17y agoThere was a huge bubble in t-bills back in november as the Great Deleverage was occurring, and the bubble has most certainly popped. Now define "safe." There's safe in terms of geopolitical risk, and then there's safe in terms of capital protection/appreciation. The former is not in question (except by few). The latter is the more complex one; as more dollars get printed, there's much less demand for treasuries as they don't protect against inflation and the returns versus the risk-weighted returns you get in other riskier assets make it not a wise choice.