Did y'all see this!?!!
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.
Is it just me or is this the emperor’s new clothes? T-bills paying nothing... And there are takers thinking this is a good rate. What’s the point? Why not just park the cash in a warehouse?
“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?”
Blue chip dividend paying stocks can provide a yield of 3% without incurring signifiant risk if you can afford to buy and hold over a long period of time. Exxon, Duke Energy, Johnson & Johnson, Johnson Controls are a few stocks that have solid franchises, pay a decent dividend, and over time realize some capital gains. Obviously their share prices go up and down the with market. Exxon is in a slump now but if you can hold the stock 5-10 years its price will recover and its dividend stream will provide better yield than Treasury bills or bank CD’s.
“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?”
Blue chip dividend paying stocks can provide a yield of 3% without incurring signifiant risk if you can afford to buy and hold over a long period of time. Exxon, Duke Energy, Johnson & Johnson, Johnson Controls are a few stocks that have solid franchises, pay a decent dividend, and over time realize some capital gains. Obviously their share prices go up and down the with market. Exxon is in a slump now but if you can hold the stock 5-10 years its price will recover and its dividend stream will provide better yield than Treasury bills or bank CD’s.
Buy "Forever" stamps?
You have described the Mineral Financial Plan. Though being down $4,000 in the last quarter was an unwanted experience. Still have 15-20 years left before I will probably have to start “using” the money.
I have implored Senior Mineral to get out of CDs as he complains of the low rates. However he cannot tolerate even the idea of a paper loss.
An advantage we have over a lot of folks is that the Mineral Home is completely paid for. As well as the Mineral Motors.
Funny that you mention that. My dad did that and it pays my mom $500/month on one property that he owned. He had about 5 rentals that he collected over the last 30 years and it really helped supplement my mom’s retirement now that he’s passed. They sold them in order to build a nest egg and keep her from having to collect rent and deal with repairs etc...
We did get one back. The couple got a divorce after about 3 years. He was so bitter he wouldn't sell because he didn't want her to get anything. It cost me about $800 in attorney fees, but before it was over with..... they literally signed a quit claim deed and deeded it back to me. I put a little bit of carpet in it and re-sold it on the same type of deal. That's never the goal. The goal is for them to be successful and me to make monthly income. But if you do get it back, you just start over.
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Did y'all see this!?!!
Forever stamps.
Actually about the best idea yet.
They are just really small scale.
We may wind up with a currency reset at some point —
Can I avoid some if this by buying a bunch of Swiss Francs, or other foreign currency (actual paper currency)?
The problem is that all currencies are failing, and the dollar will fail last most likely.
Then there is the problem of how you exchange the paper for what you need, at the time you need it, and in what marketplace?
That is why many are going to gold and silver.
Their value will never go to zero as many paper currencies have.
Gold is tracked, and silver takes up a lot of space and weight for an equivalent amount.
But at least they are convertible into any currency at any time.
Before, currency failures/depressions were limited to a country or area.
This time it is shaping up to be worldwide.
No safe havens there.
Worst scenario is like the Weimar Republic in Germany after WW1.
Hpyerinflation of the currency, and hard assets are the only thing that retains value.
Property and self sufficiency will rule the day.
Here’s another strategy similar to dollar cost averaging.
https://en.wikipedia.org/wiki/Value_averaging
Of course, all this is dependent on your particular age. If you are retired, or nearing retirement, a significant portion of your money should be in fixed income (bonds, treasuries), rather than equities.
If you are in your 30s or 40s, then there should be more bias toward the equities.
No investment vehicle offers the ability to compound wealth like equities. The facts speak for themselves.
Dang! When I first saw this I immediately thot "more garbage from Zerohedge", but then I checked the T-Bill auction result--
--and Zerohedge was right --zero! Someone above was asking why anyone would buy T-bills w/ no interest but the point is that there's more going on than just interest. I mean, it's stupid to buy a T-Bills paying ten percent when inflation's say, 20.
Right now inflation's zero--
--or so the PCE says that that's the one the Fed follows. the headline CPI only tracks consumer purchases bot the PCE tracks the entire economy.
The people that really got hurt during 11/2007 through 3/2009 were those that sold and turned unrealized losses into the real thing.
A caveat (and an important one) is to buy solid companies so that you don’t have happen to you what the dotcom speculators had happen to them in 2001. Or the folks that owned Lehman for 60 years...
My EE bonds yielding 4% tax deferred (and free of state tax) look pretty good by these standards.
I’ve got a 3 lb bag of freshly dug dirt from behinf my shed where the cat goes every day that I will sell you for $100. I personally guarantee the same interest rate the U.S. Gov’t is giving!
Line forms behind you!!
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