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

August 10, 2011 | mark | Economics

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

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My name is Mark Maunder. I've been blogging since around 2003 when I started on Movable Type and ended up on WordPress which is what I use to publish today. With my wife Kerry, I'm the co-founder of Wordfence which protects over 5 million WordPress sites from hackers and is run by a talented team of 36 people. I'm an instrument rated pilot and I fly a Cessna 206 along with a 1964 Cessna 172 in the Pacific Northwest and Colorado. I'm originally from Cape Town, South Africa but live in the US these days. I code in a bunch of languages and am quite excited about our emerging AI overlords and how they're going to be putting us to work for them.