“Can you explain why? I didn’t really understand the economic lingo in the article”
The 10-yr CDS (Credit Default Swap) hitting a record high means the market now considers the US at the greatest risk for bankruptcy that it’s ever measured, so the cost of insuring US debt is also the highest its ever been.
The yield on treasury notes is the amount of money you make if you buy one. The US treasury department issues these. Their sale is one of the ways we borrow money to fund what our taxes arent high enough to pay for.
It is super-low right now because they are in high demand, but they are in high demand because even though the government is considered at high risk for default, the US taxpayer is still considered the richest hide to carve some portion of the money out of in an international settlement if we go bust.
When you factor in inflation, you actually lose money when you buy a treasury note, but less money than you’ll lose investing anywhere else right now.
We’re entered deflation, where all asset values go into decline, so there’s no safe harbor to protect your money. Your goal needs to be to invest where you’ll lose the least money.
“When you factor in inflation...We’re entered deflation...”
This seems contradictory to me. First you’re factoring in inflation, but then you say we’ve entered deflation. I didn’t think it was possible to have both simultaneously. By the way, I’m not trying to be critical, I’m easily confused regarding financial matters, and just looking for an explanation.