Wednesday, December 10, 2008

Better in the Mattress!

Yesterday the world gave a collective vote to its view of the economy. Blah! The United States Treasury had its regular auction to borrow money. We've got lots to pay for and feed the recent largesse so borrow we must. Could it have gone better?!!? We should all be so lucky.

The Three Month T-Bill went to a negative yield. "Investors" actually paid the U.S. Government to take their money. That -0.005% yield is the the lowest since the auctions began in 1929. They actually paid more than they will get back!

It doesn't get more cautious than handing over money JUST to get it back.

If you believe that the massive global fiscal stimulus and monetary easing will fail and deflation will prevail, such such caution is warranted. It won't and irrationality is the place where long term thinking is best used.

Think ahead.

John Barnyak