Results from a $10 billion auction of 5-year TIPS drew a yield of -0.55%.

Discussion in 'Economy' started by Neubarth, Oct 25, 2010.

  1. Neubarth
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    Neubarth At the Ballpark July 30th

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    Just a few minutes ago, results from a $10 billion auction of 5-year TIPS drew a yield of -0.55%. That was the first negative yield on record!

    Oh Boy!
     
  2. loosecannon
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    loosecannon Senior Member

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    folks are worried about inflation.
     
  3. KissMy
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    KissMy Free Breast Exam

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    That is the Feds money machine at work injecting cash into the system buying up Treasuries. There is a lot of commodity inflation.
     
  4. loosecannon
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    loosecannon Senior Member

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    iow banks are using discount window money to buy inflation protected treasury securities instead of lending?
     
  5. KissMy
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    KissMy Free Breast Exam

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    Treasury Draws Negative Yield for First Time

     
  6. william the wie
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    william the wie Gold Member

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    Technically this is called a liquidity trap and means that QE cannot have useful results anymore.
     
  7. loosecannon
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    loosecannon Senior Member

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    this assumes that the purpose of QE was to combat deflation.
     
  8. Neubarth
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    Neubarth At the Ballpark July 30th

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    The Yen keeps deflating and deflating. In 1970 it was 300 to the Dollar

    Now it is 80 to the dollar.
     
  9. loosecannon
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    loosecannon Senior Member

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    the reason for that is somehow related to the fact that Japan is lending to folks outside the Japanese economy.

    But it may also mean that you can't print your way out of a deflationary trap as long as investors will still borrow your low interest currency.

    Japan is not the USA. We will see.
     
  10. KissMy
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    Let that be a lesson to the money printing crowd that think dollar weakness is the only way to increase exports from the USA. We had 375% inflation compared to Japan. Yet Japan managed to increase automobile exports into this country & put our automobile manufacturing sector out of business.

    The USA Big 3 were shut out of the small car & truck business by the Japanese auto manufacturers. So the USA Big 3 made their profits from Large SUVs & Large Pick-Up Trucks. As soon as the Japanese auto manufacturers started selling Large SUVs & Large Pick-Up Trucks into the USA it was all over for the USA Big 3 automobile manufacturers. You can believe the official cover story lie if you want, but this is what really happened.
     

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