Alea.....afraid there is such a thing as negative rates.
You will be paying the government & banks an interest
rate for them to keep your money or buy their bonds...
Banks are already charging multi million dollar account
customers a negative rate.....
Oh & the FBI have now said that people who believe that the
country should return to a gold standard are potential
terrorists.......
You make take negative interest rates & declaration of Gold
Bugs as terrorists as a healthy dollar signal........i don't.
Treasury Ponders Negative Interest Rates
By ANNIE LOWREY
A curious tidbit from a Treasury release this morning:
The question was asked if it made sense for Treasury to permit bids and awards at negative interest rates in marketable Treasury bill auctions. [A Treasury employee] noted that there were operational issues associated with such a rule change, but that the hurdles were not insurmountable. It was the unanimous view of the committee that Treasury should modify auction regulations to permit negative rate bidding and awards in Treasury bill auctions as soon as feasible.
Put simply, the Treasury Borrowing Advisory Committee, composed mostly of Wall Street types, is urging that investors be allowed to pay the government for the privilege of lending it money. For example, an investor would be able to bid and then pay the government $101 for a $100 Treasury bill.
It sounds a bit crazy. After all, a dollar bill is a perfect substitute for a zero-interest Treasury security. But Treasury bills have occasionally traded in the secondary market at negative yields, most recently in December. And at last month’s auction of 10-year Treasury inflation-protected bonds, investors accepted a real yield of negative 0.046 percent. If there is inflation over the period, however, those investors will get back more dollars than they invested. Those who buy a normal Treasury bill at a negative rate, on the other hand, would be assured of getting back less than they paid for it — unless they sell it to someone else for more, of course.
Chalk it all up to the extraordinary demand for and very high prices of United States government debt, driven by investors’ concerns about the economy, a flight to dollar-denominated assets and foreign governments’ insatiable appetite for American bonds, among other trends.
Some other countries already allow negative interest rates. Germany, for instance, lets investors bid more than its short-term “Bubills” are worth, giving the securities negative yields.
A Treasury official said in the release that it would consider whether and how to facilitate the negative interest rates in a May meeting.
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