(10 am. – promoted by ek hornbeck)
Maybe you remember news stories like this from last December, when it seemed the entire world’s economic system was about to break down.
Dec. 9 (Bloomberg) — Treasuries rose, pushing rates on the three-month bill negative for the first time, as investors gravitate toward the safety of U.S. government debt amid the worst financial crisis since the Great Depression.
Negative yields essentially mean that you are paying the government to loan it money. It’s a flight to safety at any cost. Last December was the first time it had happened since the Great Depression.
It happened again today.
(Dow Jones)–Demand for the three-month Treasury bill is ramping up as investors seeking safety heading into the end of the year stock up on the safest possible securities at a time when Treasury bills are in short supply.
Bill yields last fell below zero in late 2008 amid the financial market panic that was triggered by the Lehman Brothers bankruptcy. The decline now isn’t driven by the same sorts of fears though – it’s more about a scarce supply of T-bills amid strong demand for safe assets given the hazy economic outlook.
Scarce supply? Do they think we are morons? The Federal Government is issuing debt like it grows on trees. There is enormous mountains of treasury debt out there in the financial world because of America’s unprecedented deficits.
It was only two days ago that a Federal Reserve bank president had this to say.
Fisher told a group of bankers and business executives that he was surprised at how low rates have remained despite what he termed a “significant” increase in debt issuance.
Does the WSJ think we didn’t notice? Perhaps they think we also didn’t notice that gold, the other safe haven investment that people run to when they expect a financial collapse, was hitting new all-time records.
To put it simply, while the financial media keeps feeding us happy-talk about an economic recovery, the big money, the smart money, Da Boyz on Wall Street are running to safe havens.