Posted on 10/10/2015 4:16:27 PM PDT by Lorianne
"Investors" are so desperate to hold on to short-term paper that they paid $100 for a 3-month Treasury-bill at today's auction. That is a 0% yield - for the first time ever - lower even than the auction right after Lehman's bankruptcy in Nov 2008.
It is probably safe to say that NIRP is next, followed by more negative yields further to the right of the curve, as the US gradually becomes Europe.
But don't worry: as Yellen admitted during her healthcare-scare speech, "nominal interest rates cannot go much below zero", just a little.
what happened to the summer of recovery 7.0?
Unless it’s higher than NIRP.
Yikes.
I have zero debt to speak of and a sizable amount of cash in the bank and in the home.....what do you do with it these days?
Build a nice fire?
True, but these investors would rather get no interest and have a government bond, than to trust a bank to remain solvent.
In Germany, there is already a NIRP on their bonds, meaning that you are paying them to hold your money.
This shows a tremendous lack of confidence in the US financial system.
And, If I am not mistaken, in a the next crisis, you and I will be shareholders of the bank's debt, like Cyprus.
With the false unemployment, inflation and debt numbers coming out of DC, there is a lot of whistling past the graveyard going on right now.
The wizards at the Fed and the IMF don't have a clue how to unwind things.
We may wind up with a currency reset at some point--you know--where one new blue dollar equals ten old green dollars, and by the way, you have until such and such a date to turn in the green ones.
With the U.S. teetering as a Superpower, and the guy at the helm seeming interested only in driving it further down, there is no “safe” investment anymore.
Not that there ever was. We could have had a nuclear exchange with the Soviets. But the times seemed a bit more stable.
Today, people are very uncertain of where to put their money. It is one of the reasons that fierarms and ammunition are breaking records each month.
S&P 500 is a pretty good bet; Owning real estate that you use; farmland was big for a while. I am not partial to gold and silver.
I also believe in investing in Tea Party type politics. If we can turn the country around, it will make all investments more secure.
Actually, I was looking for some constructive suggestions, but never mind.
Tell me where I’m wrong.
Three month note @ 0%
I lend gov $100, three months later I can get $100 back, same as parking it in cookie jar.
NIRP three month note @ -3%
I lend gov $100, three months later I can get $97 back, same as from my BIL.
What’s my motivation for either deal.
Seems to me that the only way I would do either is if someone put a gun to my hesd....oh.
In Oklahoma City you can buy a 2000 sq ft house, (NOT A FIXER UPPER)..... 20 years old or so for $150 to $170k. You can pay cash for it, and then sell it for maybe 10 to 15K more than you paid for it, and carry the note. Your buyer who has money but maybe marginal credit, may have 10 to 15k to put down on it. You take their 10k, you loan them 90% of the value at 6 to 6.5% rate of interest. They'll be glad to do the deal, and if they're smart work toward fixing their credit and maybe in a few years refinance and you're out of the deal. You set it up on 30 year escrow schedule, and you balloon the note in 10 years. You're out in 10 years either way. On a 160k note..... at the end of 10 years they'll still owe you 135k or so. They're principle and interest will be right at $1000 per month. You collect and escrow in a separate account their insurance and taxes, just like a real mortgage company, and you pay those annually. Excel does all of the accounting really well.
You have an asset behind your loan instead of a CEO or a politician's word that he'll give you your money back someday.
I have done a few of these myself for myself, and I could sell a house like this every single week if I had the resources. One very simple ad on craigslist and you will have 75 or more wanting to buy under those terms. You choose who you want to be in business with.
Ok, invest in utilities stock since they are semi government and have slush funds. Can’t really go down.
Gets over 4% usually.
Deflation!
If you have paid off everything including your house, good luck finding something to invest in.
Risk everywhere.
Get some solid dividend paying equities and hang onto them. The Fortune 500 basically owns the nation and the government, so any decline in value will be temporary.
Getting 2-4% dividends beats the crap out of any return you can get in fixed income right now. You just have to master the art of not looking at your monthly statement so that your blood pressure stays in acceptable ranges.
IF it actually stays there. There’s a hint in there. You just have to find it, Luke.
I’m on your side. Seriously. ;)
Yes.
at the present time,
keeping cash in the bank is not much different
than stuffing cash in your mattress
or burying it in a mayonnaise jar in your back yard
if i were in your position i would do one of two things...
do yo have any level of trust in low-risk stocks?
if yes...
then i would buy something secure that pays a decent dividend
some examples would be T or SPH there are quite a few...
if no...
then i would buy junk circulated morgan silver dollars
and bury them in a mayonnaise jar in my back yard
I was only being sarcastic. But, on a serious note, I generally agree with you.
Know a prominent/wealthy tax and estate lawyer and that was what he was telling his clients.
Investigate yourself, at least it is an idea for you to look into.
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