Buffett, Gold and the Gold Standard [View article]
@Briar and Tony:
You're both making good points on the upside of credit/debt creation. We wouldn't have financial assets if they weren't a good thing on balance. However, my point to Tony was related to base money, not the resulting financial assets that it makes possible.
Under a gold standard, money came about via gold mine production (also by incorporating existing non-monetary gold, but we can ignore that). Stability depended upon mine output maintaining the relative value of gold against all other goods and services in the aggregate. Too little gold output and you had deflation, too much and inflation, all else equal.
Under a fiat monetary system, new money comes about via federal budget deficits. The process is somewhat more complicated in operation, but when you boil it down, the essential fact is that creation of new units of money relies directly upon the Treasury taking in less than it puts out. Without budget deficits, the creation of credit, which you guys clearly understand is a good thing, would be increasingly difficult.
Thus, we have to realize that a federal budget in balance or surplus is akin to a shuttered gold mining industry in the 19th century. It's a bad idea under most conditions, and an especially bad idea under pessimistic and deflationary conditions. For a historical example, look at the global Long Depression of 1873-1896. It finally ended when vast discoveries of gold occurred in South Africa c. 1896. The large federal deficits of the past two years have had a similar effect.
Once everyone grasps that, then we can move on to constructive political debate over how federal deficits should come about: Via tax cuts? On whom, what, and how much? Via spending? On whom, what, and how much? If we find ourselves dealing with rising inflation, then we can tighten up the federal budget and/or monetary policy (less speculation, fewer credit market distortions, more income for pensioners and pension funds, etc).
P.S. People tend to associate federal deficits with federal debt on a $ for $ basis, but there's no need for that to hold. The US, like Japan and the UK (and EMU if it were honest) is essentially self-financing, due to its ability to create the money used to service its debt. Markets wouldn't like it, nor would economists, but Treasury could technically retire all of its outstanding debt in a short period of time if it wanted to, and still run a deficit.
Buffett, Gold and the Gold Standard [View article]
@ Tony re "The printing press (or computer terminal) substitutes for taxes"
That may be true at times, but under our current system, keystrokes at the Fed are also analogous to gold mining under gold standards. Too few keystrokes (or insufficient federal deficits) can be just as bad as too many (or excessive federal deficits).
There's definitely plenty of agency risk involved. A better approach might be to push federal deficit spending directly to individuals. See Warren Mosler's proposed payroll tax holiday for employEES, for example (moslereconomics.com/20.../).
Buffett, Gold and the Gold Standard [View article]
You're welcome. Happy to meet someone who find this stuff interesting (there aren't many!).
Re: "my feeling is that it is harder to manipulate [gold] than the current system", that's how the myth goes, but I'm not so sure. The 1920s saw an incredible amount of gold standard manipulation. Again, the problem was the institutionalized expectation that the world had to return to 1914 parity, even though it was completely out of whack with the real economy. Central banks manipulated the system for almost a decade in order to avoid the shocks it would cause and to spread the pain of adjustment out over time. But that ended up creating even greater vulnerabilities. Johnson's book covers it. Other good sources are Eichengreen's Golden Fetters and Benjamin Anderson's Economics and the Public Welfare. If you can find it, Gustav Cassell's Crisis in the World's Monetary System, a lecture he gave in 1932, is a short and fascinating book. As Mundell pointed out in his Nobel speech, Cassell and two contemporaries (Rist and Mises) were among the only prominent economists who foresaw what a forceful return to 1914 parity would do (depression). I suspect Knut Wicksell would have had he been alive.
Forget the tax cuts; we need hiring programs, Robert Shiller says in a visit with CNBC. Public upset with unemployment is hitting confidence, and the economy needs more government support - but at the state and local level rather than federal. [View news story]
@ Eggfaced
Re "Monopolies exist because a company does something so much better than anybody else and produces a superior product for less money."
That can only be assured in an economy governed by a strong rule of law, with consumer choice and competition. But in a competitive economy, monopoly is unsustainable. For example, Apple is king of its space, but it's no more of a monopoly than my old game of Sorry! is. Neither is Microsoft or any of the other 800 pound gorilla oligopolies.
Monopolies tend to exist for far different reasons, and in greater number, and for much longer, when the law (i.e., the government) is weak and certain people maintain asymmetrical privilege and power. Look outside the U.S. You'll find 'em.
Forget the tax cuts; we need hiring programs, Robert Shiller says in a visit with CNBC. Public upset with unemployment is hitting confidence, and the economy needs more government support - but at the state and local level rather than federal. [View news story]
@ Eggfaced
You're right about savings vs "stagnant wealth", but saving and spending do not quite have the same effect on GDP. More importantly, the (federal) govt does not just reallocate wealth. It actually creates it too, in the form of financial assets, which come about via federal budget deficits. I know all of the standard objections to this, but it's no more controversial than observing that under a classical gold standard, marginal gold production is what enabled an economy to meet its desired level of aggregate savings. We really need to get this right before we can craft sound long term policies for anything.
Forget the tax cuts; we need hiring programs, Robert Shiller says in a visit with CNBC. Public upset with unemployment is hitting confidence, and the economy needs more government support - but at the state and local level rather than federal. [View news story]
@ Silentz
An employer of last resort (seekingalpha.com/symbo...) policy shouldn't be too controversial. We already have:
Lender of last resort (the Fed) Insurer of last resort (Social Security, Medicare) Provider of last resort (food stamps, Medicaid) Defender of last resort (military, natl guard, peace officers) Educator of last resort (public schooling) etc.
These are precisely the kinds of things that a national govt can actually excel at, in theory if not always in practice (Art Laffer proposed that Obama's health care proposals be countered with universal catastrophic coverage, for example). So if we can backstop the financial system, and have done so for almost a century, why wouldn't we at least consider backstopping the labor market with a subsistence level of employment? Even if you're philosophically opposed (I used to be), empirically and anecdotally it worked pretty well during the 1930s. And those programs might have continued if not for WW2 and the post-WW2 and baby boomer tailwinds we enjoyed for 60 years. As long as it's done in a way that wouldn't create significant shocks for the private sector, it has a lot of potential benefits. And for those who rail against unemployment benefit extensions for the still unemployed, it seems like a no-brainer. At least you're getting something for the outlays.
There are some economists on the left who propose this kind of thing of course, but not as many as you might think (check out the UMKC blog, for example). But there's also Ned Phelps, a conservative economist, who proposed a similar idea in his book Rewarding Work. At least give it some consideration before you reject it out of hand.
Where/when did I say your points were invalid? I said there are plenty of valid points on different sides of this issue. But when you consistently open your comments to a disagreeable article with things like: "What a piece of garbage", "Shallow and shoddy analysis", "Author needs to go back to school", it's like a declaration of "I, Jeff Nielson, am a pompous arrogant prick who is never wrong." If that's what you're going for, cool, you are free to ignore my feedback. If not, then I'm just suggesting you take a different approach to people with competing opinions; not to take it easy on them when you think you have a powerful counter argument; but to stop with the reflexive "You're so stupid" preamble that most of us dropped before we left high school.
Buffett, Gold and the Gold Standard [View article]
Stephen, nice article, thanks. You hit the bullseye with this: "this could have been remedied by simply maintaining the convertibility of the currency to the proportion of silver’s availability, rather than to the metal’s physical weight."
The Achilles heel of most precious metals standards was that money's nominal parity could not be recalibrated to changes in the the real relative value of the underlying metal or metals. The flip side to the influx of New World silver was the need to find it in the first place due to deflation. Inflexible parity has been a factor in other periods of colonization and exploitation, as well as the first currency wars between China and the west, Long Depression of 1873-1896, GD, WW2, etc.
However, once you admit the need for periodic recalibration within a precious metal or other commodity based system, things start to look an awful lot like modern monetary systems. Trying to set the optimal exchange value between money and gold is analogous to setting the optimal price of a new unit of money (via an overnight interest rate target, for example). I'm not convinced that one is preferable to the other. The only thing I'm confident in is that under both approaches, a periodic referendum would lead to the most optimal policy target, be it the dollar price of gold or an overnight interest rate (symmetrycapital.net/in.../).
[I like your Peter Bernstein book recommendation. I strongly recommend H. Clark Johnson's Gold, France and the Great Depression, as well as Robert Mundell's Nobel acceptance speech. Have you already read Jastram's The Golden Constant?]
It's true that most of the gold ever mined is still in existence. As Frank Knight postulated, gold was a fairly good measure of value because it tended to accumulate over the very long term at an annualized rate that roughly paralleled capital accumulation (or output growth, if you prefer).
But that doesn't mean that it has no meaningful long term relationship to high turnover commodites. Look up Roy Jastram's "retrieval phenomenon".
To the extent that they represent an excessive creation of financial assets (a Minsky-like proposition as well as an Austrian one), it is worrisome (and was a, if not the, primary cause of the financial crisis).
But to the extent that it reflects a long term rise in gold's value relative to all other assets and output (a reasonable assumption barring any major discoveries or technological innovations in production), it's pretty natural. Happens to lend some support to long term gold bugs too (though I'm not one).
You seem to pull this crap whenever someone posts anything that runs counter to your vision of gold's future. As I noted above, the analysis was Nomura's. The author posted it for readers because he found it interesting and relevant, and yes, probably b/c it's supportive of his outlook. You should be able to make some room for competing opinions, unless yours is the only reasonable mind in existence (if it "obviously" is, then it's "grossly misleading" of me to suggest otherwise, and you have my sincere apologies...).
And speaking of shallow and shoddy analysis, if you're going to look at portfolio preferences, you need to look at all assets, not just gold. You might be right about gold (though (1) I personally prefer assets that generate cash, and (2) Wall Street advice for the general public has rarely ever been timely). If you did, you'd observe that the upside for bonds, including Treasuries, might be just as compelling if not moreso (residential real estate and equities, not so hot). Those shifting portfolio preferences might explain why gold and Treasuries have rallied together.
In any case, you really ought to stop peeing on the carpet of whoever disagrees with you, lest people start to think you're an arrogant pr**k. Unless that's what you're gunning for.
Easy there Power Ranger. Your second point was "2) Every country is running massive budget deficits." Is that true?
And your points 3 and 4 do not argue for inflation. Quite the opposite.
Reasonable minds should be able to differ (civilly) on where gold goes from here. For example, it could outperform if key nations are able to induce inflation. But I think that's going to be very difficult to do (other than major central banks wreaking havoc on the budgets of developing world households and govts).
One widely overlooked factor is that the demographic transition, which began in the developed world in the mid-19th century, has been periodically juicing economies, markets, interest rates, and inflation for about 150 years. In Japan, that ended around the turn of the 1990s. In the US and most other developed economies, it ended at the turn of this century. So the new normal is actually the old normal (with a balance sheet recession to boot). That means we need to revisit the assumptions that were developed post WW2 and after the 1960s and 70s. Ferguson is a good scholar, but he still takes a lot of those assumptions at face value.
Setting my thesis aside, all the Nomura charts show is that there's a seeming divergence between gold and other commodity prices (check out Roy Jastram's retrieval phenomenon in his book The Golden Constant, if you can find it). All the author has done is share some of Nomura's work with readers. Assuming his disclosures are accurate, he's not talking his book, and I don't get the impression that he's providing any advice. Are you really going to try to cast doubt on his professional abilities without knowing anything about him other than this article? As I said, reasonable minds can and should differ on gold. There's no need for the insults and name calling.
P.S. Tip from an old dog -- the sooner you can avoid the trap of referring to works and people who closely support your beliefs and biases as "seminal", and people who oppose them "idiots", the better. I wish someone had told me that when I was a newly minted college grad. Some things in life are actually a little complicated. Good historians as well as good economists understand that tradeoffs abound.
Avoid Treasuries - At Least for Now [View article]
The market could be substantial, considering the clients it's being pitched to (e.g., pension funds). Personally, I wouldn't consider it a carry trade though, as it simply levers up a bet in a single currency, whereas a carry trade seeks to exploit real interest rate differentials between the funding currency and some other asset(s), sometimes including another currency. Forex or relative interest rate shocks aren't likely to directly derail risk parity trades, not as long as they are denominated in a single currency.
Avoid Treasuries - At Least for Now [View article]
I was disapointed in the Jeremies' op-ed. To be fair, if you were merely debating a short term trade in a Treasury ETF vs an equity index ETF, some of their points make sense. But for a liability driven investor -- including "coupon clippers" -- the comparisons of USTs to equities (esp to the Nasdaq c. 2000) were rather meaningless:
"...there is absolutely no sound basis for comparing earning yields on tech stocks at the height of the Nasdaq to cash flow yields from Treasury securities. Tech stocks were speculative, few paid any dividends, and the return of one’s initial investment capital was highly unlikely. Coupon bearing Treasuries offer periodic cash flows and, if purchased at par, full return of nominal principal, guaranteed by the full faith and credit of the U.S. government. The real puzzle is that Treasuries yielded 6% at certain points during the tech bubble, and have only slowly come down to their current levels. Some of the investing world’s preeminent names are assessing the road ahead by looking in the rear view mirror."
Avoid Treasuries - At Least for Now [View article]
How can the govt of Japan default on its debt when it's the monopoly issuer of the money used to service its debt? Granted, it's remotely possible that its debt burden will be lightened via inflation (remotely possible). Default? Not gonna happen.
Buffett, Gold and the Gold Standard [View article]
You're both making good points on the upside of credit/debt creation. We wouldn't have financial assets if they weren't a good thing on balance. However, my point to Tony was related to base money, not the resulting financial assets that it makes possible.
Under a gold standard, money came about via gold mine production (also by incorporating existing non-monetary gold, but we can ignore that). Stability depended upon mine output maintaining the relative value of gold against all other goods and services in the aggregate. Too little gold output and you had deflation, too much and inflation, all else equal.
Under a fiat monetary system, new money comes about via federal budget deficits. The process is somewhat more complicated in operation, but when you boil it down, the essential fact is that creation of new units of money relies directly upon the Treasury taking in less than it puts out. Without budget deficits, the creation of credit, which you guys clearly understand is a good thing, would be increasingly difficult.
Thus, we have to realize that a federal budget in balance or surplus is akin to a shuttered gold mining industry in the 19th century. It's a bad idea under most conditions, and an especially bad idea under pessimistic and deflationary conditions. For a historical example, look at the global Long Depression of 1873-1896. It finally ended when vast discoveries of gold occurred in South Africa c. 1896. The large federal deficits of the past two years have had a similar effect.
Once everyone grasps that, then we can move on to constructive political debate over how federal deficits should come about: Via tax cuts? On whom, what, and how much? Via spending? On whom, what, and how much? If we find ourselves dealing with rising inflation, then we can tighten up the federal budget and/or monetary policy (less speculation, fewer credit market distortions, more income for pensioners and pension funds, etc).
P.S. People tend to associate federal deficits with federal debt on a $ for $ basis, but there's no need for that to hold. The US, like Japan and the UK (and EMU if it were honest) is essentially self-financing, due to its ability to create the money used to service its debt. Markets wouldn't like it, nor would economists, but Treasury could technically retire all of its outstanding debt in a short period of time if it wanted to, and still run a deficit.
moslereconomics.com
Counter Insurgency, Deficit Terrorist Unit
Buffett, Gold and the Gold Standard [View article]
That may be true at times, but under our current system, keystrokes at the Fed are also analogous to gold mining under gold standards. Too few keystrokes (or insufficient federal deficits) can be just as bad as too many (or excessive federal deficits).
There's definitely plenty of agency risk involved. A better approach might be to push federal deficit spending directly to individuals. See Warren Mosler's proposed payroll tax holiday for employEES, for example (moslereconomics.com/20.../).
www.moslereconomics.com
Counter Insurgency, Deficit Terrorist Unit
Buffett, Gold and the Gold Standard [View article]
Re: "my feeling is that it is harder to manipulate [gold] than the current system", that's how the myth goes, but I'm not so sure. The 1920s saw an incredible amount of gold standard manipulation. Again, the problem was the institutionalized expectation that the world had to return to 1914 parity, even though it was completely out of whack with the real economy. Central banks manipulated the system for almost a decade in order to avoid the shocks it would cause and to spread the pain of adjustment out over time. But that ended up creating even greater vulnerabilities. Johnson's book covers it. Other good sources are Eichengreen's Golden Fetters and Benjamin Anderson's Economics and the Public Welfare. If you can find it, Gustav Cassell's Crisis in the World's Monetary System, a lecture he gave in 1932, is a short and fascinating book. As Mundell pointed out in his Nobel speech, Cassell and two contemporaries (Rist and Mises) were among the only prominent economists who foresaw what a forceful return to 1914 parity would do (depression). I suspect Knut Wicksell would have had he been alive.
Forget the tax cuts; we need hiring programs, Robert Shiller says in a visit with CNBC. Public upset with unemployment is hitting confidence, and the economy needs more government support - but at the state and local level rather than federal. [View news story]
Re "Monopolies exist because a company does something so much better than anybody else and produces a superior product for less money."
That can only be assured in an economy governed by a strong rule of law, with consumer choice and competition. But in a competitive economy, monopoly is unsustainable. For example, Apple is king of its space, but it's no more of a monopoly than my old game of Sorry! is. Neither is Microsoft or any of the other 800 pound gorilla oligopolies.
Monopolies tend to exist for far different reasons, and in greater number, and for much longer, when the law (i.e., the government) is weak and certain people maintain asymmetrical privilege and power. Look outside the U.S. You'll find 'em.
Heel your dogma pal. ;)
Forget the tax cuts; we need hiring programs, Robert Shiller says in a visit with CNBC. Public upset with unemployment is hitting confidence, and the economy needs more government support - but at the state and local level rather than federal. [View news story]
You're right about savings vs "stagnant wealth", but saving and spending do not quite have the same effect on GDP. More importantly, the (federal) govt does not just reallocate wealth. It actually creates it too, in the form of financial assets, which come about via federal budget deficits. I know all of the standard objections to this, but it's no more controversial than observing that under a classical gold standard, marginal gold production is what enabled an economy to meet its desired level of aggregate savings. We really need to get this right before we can craft sound long term policies for anything.
moslereconomics.com
Counter Insurgency, Deficit Terrorist Unit
Forget the tax cuts; we need hiring programs, Robert Shiller says in a visit with CNBC. Public upset with unemployment is hitting confidence, and the economy needs more government support - but at the state and local level rather than federal. [View news story]
An employer of last resort (seekingalpha.com/symbo...) policy shouldn't be too controversial. We already have:
Lender of last resort (the Fed)
Insurer of last resort (Social Security, Medicare)
Provider of last resort (food stamps, Medicaid)
Defender of last resort (military, natl guard, peace officers)
Educator of last resort (public schooling)
etc.
These are precisely the kinds of things that a national govt can actually excel at, in theory if not always in practice (Art Laffer proposed that Obama's health care proposals be countered with universal catastrophic coverage, for example). So if we can backstop the financial system, and have done so for almost a century, why wouldn't we at least consider backstopping the labor market with a subsistence level of employment? Even if you're philosophically opposed (I used to be), empirically and anecdotally it worked pretty well during the 1930s. And those programs might have continued if not for WW2 and the post-WW2 and baby boomer tailwinds we enjoyed for 60 years. As long as it's done in a way that wouldn't create significant shocks for the private sector, it has a lot of potential benefits. And for those who rail against unemployment benefit extensions for the still unemployed, it seems like a no-brainer. At least you're getting something for the outlays.
There are some economists on the left who propose this kind of thing of course, but not as many as you might think (check out the UMKC blog, for example). But there's also Ned Phelps, a conservative economist, who proposed a similar idea in his book Rewarding Work. At least give it some consideration before you reject it out of hand.
Is Gold Getting Overbought? [View article]
Where/when did I say your points were invalid? I said there are plenty of valid points on different sides of this issue. But when you consistently open your comments to a disagreeable article with things like: "What a piece of garbage", "Shallow and shoddy analysis", "Author needs to go back to school", it's like a declaration of "I, Jeff Nielson, am a pompous arrogant prick who is never wrong." If that's what you're going for, cool, you are free to ignore my feedback. If not, then I'm just suggesting you take a different approach to people with competing opinions; not to take it easy on them when you think you have a powerful counter argument; but to stop with the reflexive "You're so stupid" preamble that most of us dropped before we left high school.
Buffett, Gold and the Gold Standard [View article]
The Achilles heel of most precious metals standards was that money's nominal parity could not be recalibrated to changes in the the real relative value of the underlying metal or metals. The flip side to the influx of New World silver was the need to find it in the first place due to deflation. Inflexible parity has been a factor in other periods of colonization and exploitation, as well as the first currency wars between China and the west, Long Depression of 1873-1896, GD, WW2, etc.
However, once you admit the need for periodic recalibration within a precious metal or other commodity based system, things start to look an awful lot like modern monetary systems. Trying to set the optimal exchange value between money and gold is analogous to setting the optimal price of a new unit of money (via an overnight interest rate target, for example). I'm not convinced that one is preferable to the other. The only thing I'm confident in is that under both approaches, a periodic referendum would lead to the most optimal policy target, be it the dollar price of gold or an overnight interest rate (symmetrycapital.net/in.../).
[I like your Peter Bernstein book recommendation. I strongly recommend H. Clark Johnson's Gold, France and the Great Depression, as well as Robert Mundell's Nobel acceptance speech. Have you already read Jastram's The Golden Constant?]
Is Gold Getting Overbought? [View article]
But that doesn't mean that it has no meaningful long term relationship to high turnover commodites. Look up Roy Jastram's "retrieval phenomenon".
Is Gold Getting Overbought? [View article]
To the extent that they represent an excessive creation of financial assets (a Minsky-like proposition as well as an Austrian one), it is worrisome (and was a, if not the, primary cause of the financial crisis).
But to the extent that it reflects a long term rise in gold's value relative to all other assets and output (a reasonable assumption barring any major discoveries or technological innovations in production), it's pretty natural. Happens to lend some support to long term gold bugs too (though I'm not one).
Is Gold Getting Overbought? [View article]
You seem to pull this crap whenever someone posts anything that runs counter to your vision of gold's future. As I noted above, the analysis was Nomura's. The author posted it for readers because he found it interesting and relevant, and yes, probably b/c it's supportive of his outlook. You should be able to make some room for competing opinions, unless yours is the only reasonable mind in existence (if it "obviously" is, then it's "grossly misleading" of me to suggest otherwise, and you have my sincere apologies...).
And speaking of shallow and shoddy analysis, if you're going to look at portfolio preferences, you need to look at all assets, not just gold. You might be right about gold (though (1) I personally prefer assets that generate cash, and (2) Wall Street advice for the general public has rarely ever been timely). If you did, you'd observe that the upside for bonds, including Treasuries, might be just as compelling if not moreso (residential real estate and equities, not so hot). Those shifting portfolio preferences might explain why gold and Treasuries have rallied together.
In any case, you really ought to stop peeing on the carpet of whoever disagrees with you, lest people start to think you're an arrogant pr**k. Unless that's what you're gunning for.
Is Gold Getting Overbought? [View article]
Easy there Power Ranger. Your second point was "2) Every country is running massive budget deficits." Is that true?
And your points 3 and 4 do not argue for inflation. Quite the opposite.
Reasonable minds should be able to differ (civilly) on where gold goes from here. For example, it could outperform if key nations are able to induce inflation. But I think that's going to be very difficult to do (other than major central banks wreaking havoc on the budgets of developing world households and govts).
One widely overlooked factor is that the demographic transition, which began in the developed world in the mid-19th century, has been periodically juicing economies, markets, interest rates, and inflation for about 150 years. In Japan, that ended around the turn of the 1990s. In the US and most other developed economies, it ended at the turn of this century. So the new normal is actually the old normal (with a balance sheet recession to boot). That means we need to revisit the assumptions that were developed post WW2 and after the 1960s and 70s. Ferguson is a good scholar, but he still takes a lot of those assumptions at face value.
Setting my thesis aside, all the Nomura charts show is that there's a seeming divergence between gold and other commodity prices (check out Roy Jastram's retrieval phenomenon in his book The Golden Constant, if you can find it). All the author has done is share some of Nomura's work with readers. Assuming his disclosures are accurate, he's not talking his book, and I don't get the impression that he's providing any advice. Are you really going to try to cast doubt on his professional abilities without knowing anything about him other than this article? As I said, reasonable minds can and should differ on gold. There's no need for the insults and name calling.
P.S. Tip from an old dog -- the sooner you can avoid the trap of referring to works and people who closely support your beliefs and biases as "seminal", and people who oppose them "idiots", the better. I wish someone had told me that when I was a newly minted college grad. Some things in life are actually a little complicated. Good historians as well as good economists understand that tradeoffs abound.
Avoid Treasuries - At Least for Now [View article]
Avoid Treasuries - At Least for Now [View article]
"...there is absolutely no sound basis for comparing earning yields on tech stocks at the height of the Nasdaq to cash flow yields from Treasury securities. Tech stocks were speculative, few paid any dividends, and the return of one’s initial investment capital was highly unlikely. Coupon bearing Treasuries offer periodic cash flows and, if purchased at par, full return of nominal principal, guaranteed by the full faith and credit of the U.S. government. The real puzzle is that Treasuries yielded 6% at certain points during the tech bubble, and have only slowly come down to their current levels. Some of the investing world’s preeminent names are assessing the road ahead by looking in the rear view mirror."
symmetrycapital.net/in.../
Avoid Treasuries - At Least for Now [View article]