Okay
Who buys a bond or T-Bill that pays 0% interest?
Even if inflation is 3% it is still eating your lunch.
Why would anyone invest in a bond that is guaranteed to lose money.
Some places in Europe have *negative* interest rates.
Who buys negative interest rates? But they have them in Europe.
The answer is people looking for a safe place to store money. There are risks and costs with putting it in a vault, or even your local bank.
Who buys a bond or T-Bill that pays 0% interest?
Why would anyone invest in a bond that is guaranteed to lose money.
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It’s not guaranteed. Rates can go lower and the bond will go up in price.
Even if inflation is 3% it is still eating your lunch.
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It’s better than 6% inflation.
It’s also better than an economy that stops growing and producing what we need.
A damaged economy is what causes harmful inflation as evidenced by countries like Venezuela, Zimbabwe, and Iran.