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

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Notify me of followup comments via e-mail. You can also subscribe without commenting.