“Our government is flat broke now; how is it going to bail out millions of depositors with anything but absolutely worthless paper?”
Our “worthless” paper is still worth a lot. Right now people, corporations and government worldwide are loaning us money at 1.6% on a ten year note, which means they agree to be repaid in ten years with our “worthless” paper. They may indeed prove to be foolish, but right now, US treasuries are viewed by most of the world as one of the soundest investments that can be made. Who else can borrow money at such a low rate?
US treasuries are viewed by most of the world as one of the soundest investments that can be made. Who else can borrow money at such a low rate?
You’ll get even less from Japan than you do from the US.
Last week, Germany had a debt sale. The nominal interest rate was negative 5 bp. on 1 year debt. Yes - investors loaned Germany money for a year, knowing they would get back $99.95 for every $100 they loaned.