Post Race!

It works because nobody cares about the deficit.

I'm pretty much a deficit hawk, but I find I kind of have to sit on my hands these days. The deficit is HUGE, but the debt is Treasury bills, which are dirt cheap. The interest rate is so low they're barely worth having, though I have my share, as well. The reason people hold them is because it's the safest stash for cash in the world today. Yeah, the returns are pretty poor, but they're quite reliable, too, so in times of doubt, people pour into US debt. So, with interest rates down around 1%, and people buying hand over fist, it's practically free money for the government. All of us who have treasury bills are the ones loaning them the money, which means lots of Americans, but lots of foreign sources, as well. The world will pay the US bills, even with a puny interest rate, as long as everybody trusts that the US government is good for it.

That's particularly ironic, in this case. After all, there's talk of giving all taxpayers some chunk of money. I don't need it, so what would I do with it if they gave me a check? I'd put it into my rainy day bond fund...which would mean that they'd be going into debt to give me money that I'd use to buy a bit more government debt. That seems very circular.

I hate the debt too. I knew the debt was tied to the bonds but what I don't understand is where did this trillion they're going to give people come from? Was it just sitting in a safety deposit box some where. Is there some type of emergence fund somewhere. Or is it lets fire up the presses and print another trillion?

There is a push for the latter, and it may happen. Printing money is generally thought to push up inflation, and eventually it must, but inflation has been so low for so long that there are plenty of people who think that a bit more inflation would be good. Not too much, but a bit.

If that isn't done, then, yeah, it's pretty much just sitting around in safety deposit boxes. It's a huge number, but compared to the global pool of wealth, it's trivial. Right now, EVERYTHING is selling. Stocks are tanking, but bonds are down, as well, as is gold, oil, and economically significant metals like copper. If everybody is selling, then where's the money going? If people are selling, then somebody is buying. They're just not paying as much. The same number of stocks are out there, you can just buy them for a LOT less than you could a month and a half back. So, if all the big hedges are selling, then there's a whole lot of money that is going out of the market, and it has to go somewhere. Right now, it's going into cash. That's...something unusual, as far as I can tell.

A quick look wasn't able to show me how much money has been pulled out of stocks and bonds, thus far, but I think it's tens of trillions. If that's moving into cash positions, then that's the money that would buy the new bonds the government sells to cover the trillion dollars. Of course, they have to sell bonds that are attractive enough that people holding that money want to buy them, which is why bond interest rates are going up. If people don't want to buy your bonds, you have to offer a higher interest rate to entice them. Considering the trillions of dollars involved, that higher interest can creep up by tenths of a percent at a time, as every tenth of a percent would entice some small percentage to buy, but a small percentage of trillions is still a very large number.

Frankly, I'd be happy to see bond yields increase. I use a bond fund as a rainy day fund because bank accounts offer so very little. Bond funds don't offer all that much, either, especially if the bonds are primarily ultra-safe US treasury products, but every little increase in yield helps.

When it comes to rain, can it possibly wash away the coronavirus in the streets?

Its raining here today. hard too. Will we be clean and released from quarantine? Nope

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Originally Posted by RobDog888

Its raining here today. hard too. Will we be clean and released from quarantine? Nope

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I wish it would rain here so the folks will stay inside their homes, they are actually outside even while we are supposed to be in home quarantine, I don't know who is supposed to enforce the home quarantine thingy here, it makes me sad that so many are not following the order. :(

I am pretty certain that I will get fat staying home, eating all the food and snacks that I have purchased.

What food and snacks? - my supermarkets' shelves are empty :mad:

Shelves are getting filled fast, over here. They're just emptying even faster. Have to shop in the morning to get stuff.

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Originally Posted by dclamp

I am pretty certain that I will get fat staying home, eating all the food and snacks that I have purchased.

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It's been known to happen,

Attachment 175457

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Originally Posted by dee-u

I wish it would rain here so the folks will stay inside their homes, they are actually outside even while we are supposed to be in home quarantine, I don't know who is supposed to enforce the home quarantine thingy here, it makes me sad that so many are not following the order. :(

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the news had show this weekend how many people were out at the beach, hiking and doing various other social activities. The complete opposite of distancing :rolleyes:

My hiking is pretty much distancing, but there's too much snow in the mountains. When I'm hiking I maintain the required 6 miles of separation from everybody. I expect to exceed that on a hike this summer.

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Originally Posted by wes4dbt

It's been known to happen,

Attachment 175457

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Where did you get those photos of me!?

I am glad to have a government job and be considered essential. Seeing a lot of people laid off from their jobs right now, couldn't imagine. Hopefully these people were smart enough to have a safety net.

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the news had show this weekend how many people were out at the beach, hiking and doing various other social activities. The complete opposite of distancing

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Yeah, we've got the same breed of idiots over here. By all accounts Snowdon had it's busiest day in years:rolleyes:

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Originally Posted by dclamp

I am glad to have a government job and be considered essential. Seeing a lot of people laid off from their jobs right now, couldn't imagine. Hopefully these people were smart enough to have a safety net.

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It's shrinking day by day.

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Originally Posted by dclamp

I am glad to have a government job and be considered essential. Seeing a lot of people laid off from their jobs right now, couldn't imagine. Hopefully these people were smart enough to have a safety net.

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I feel the same way, there are a lot of people here who are only surviving by the day and they are the ones mostly affected by these "lockdown" in our area right now.

Another day of employment. :) The court system needs to stay open and actually get back to full operations or we will shut down permanently :(

I've been thinking about this, and have to ask: What does the court system have to do with this? I haven't heard them being particularly in trouble, nor particularly involved.

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Originally Posted by Shaggy Hiker

I've been thinking about this, and have to ask: What does the court system have to do with this? I haven't heard them being particularly in trouble, nor particularly involved.

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I'd say just another social distancing precaution. You ever been in a jury pool or traffic court?