The world is now paying the US government more to store their money.

I ran across this page on the Treasury’s website via Marc Cuban’s blog. It shows the yield on US government treasury bonds, adjusted for inflation. If the yield on a bond is 3% and inflation is 2.5%, the real yield is 0.5%.

So in inflation adjusted terms, anyone buying 5yr treasuries today is paying the US government 1.02% per year to store their money.

Curiously, after the downgrade, the world is paying the US government even more to store their money.

 

Treasury real yield curve