From Krugman:
3-month Treasury bills have zero interest. In that you'd probably have to pay a handling fee, they're no different from renting a safe-deposit box and stuffing it full of currency. Look at the chart and see when the last time was that they were at a zero interest rate.
The ones your girlfriends warned you about.
1 hour ago
2 comments:
Go look at Krugman's blog a couple days ago, when he talks about what happens when interest rates hit the zero boundary. I.e., at the zero boundary, you can print all the cash you want and it just goes under mattresses, either physical ones or virtual ones (like the $4 *trillion* that Bernanke printed and that the banks swiftly stuck into their electronic vaults at the Federal Reserve, not to touch, because at the zero boundary cash effectively substitutes for short-term lending). Krugman has the equations. They match what I just described, just more mathematically.
We are so, so fucked...
- Badtux the Sore Penguin
NPR had a feature about zero interest T Bills, saying people were just parking their money there for lack of any better ideas.
BadTux summed it up- we are totally fucked.
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