The 13 week US Treasury rate is exploding.
2022 Jun 14, 9:26am 413 views 8 comments
by Al_Sharpton_for_President follow (6)
Why keep your cash in a low-yielding bank account, if you don't mind tying it up for 13 weeks? And even if you need it before then, you can sell, although at this pace it might be at a loss but you never know.
Comments 1 - 8 of 8 Search these comments
1
B.A.C.A.H.
2022 Jun 14, 9:28am
B.A.C.A.H.
2022 Jun 14, 9:28am
Good.
The FRNs i got during the Financial Repression are indexed to that maturity.
The FRNs i got during the Financial Repression are indexed to that maturity.
2
Malcolm
2022 Jun 14, 9:37am
Malcolm
2022 Jun 14, 9:37am
I bought I bonds. They currently pay 9.6%. Pure insanity. I literally think it is part of a scheme to move money, not just out of the marketplace, but out of the banks. How can I be earning more on a bond than someone can borrow for a mortgage?
3
Patrick
2022 Jun 14, 9:44am
Patrick
2022 Jun 14, 9:44am
I think the amount an individual is allowed to invest in an I Bond is limited, but the principle is indeed insanity.
If you can borrow at less than you can get, you have an infinite motion machine.
If you can borrow at less than you can get, you have an infinite motion machine.
4
B.A.C.A.H.
2022 Jun 14, 9:47am
B.A.C.A.H.
2022 Jun 14, 9:47am
Al,
The US Treasury department will broker treasury debt for everyday folks like us. Every instrument is available, no commissions, no fees. Supposedly they will act as a broker to sell them at market prices in the marketplace. I haven't tried that yet. Maybe I will someday.
Unlike the retail brokerages that require transacting in multiples of $1k, the treasury will broker in $100 multiples. I have several positions that are not in $1k multiples.
It requires linkage to a retail bank account.
The treasury has a type of position called "Certificate Of Indebitedness" that acts as a cash-sweep-account. The COI pays no interest. It's your cash on deposit with the United States Treasury.
When you purchase a treasury debt with this service, you have the option of direct debit to your linked retail bank account, or to take the funds from your COI balance.
Same thing for interest payments and maturity payouts: you direct it to either account you wish: linked retail bank account or COI account.
In this way a retail bank depositor can use the United States Treasury debt to earn a bit of interest on deposits while the retail banks pay nothing. Gradually over the years, I have pared down my balances at the retail banks to the bare minimum for managing everyday living expenses and to maintain some minimums for some "perks". The rest is at the Treasury in FRNs and various maturities one month to two year.
A friendly reminder to we Tax Donkeys in high tax states like mine (California): all the interest is free of state income tax.
The US Treasury department will broker treasury debt for everyday folks like us. Every instrument is available, no commissions, no fees. Supposedly they will act as a broker to sell them at market prices in the marketplace. I haven't tried that yet. Maybe I will someday.
Unlike the retail brokerages that require transacting in multiples of $1k, the treasury will broker in $100 multiples. I have several positions that are not in $1k multiples.
It requires linkage to a retail bank account.
The treasury has a type of position called "Certificate Of Indebitedness" that acts as a cash-sweep-account. The COI pays no interest. It's your cash on deposit with the United States Treasury.
When you purchase a treasury debt with this service, you have the option of direct debit to your linked retail bank account, or to take the funds from your COI balance.
Same thing for interest payments and maturity payouts: you direct it to either account you wish: linked retail bank account or COI account.
In this way a retail bank depositor can use the United States Treasury debt to earn a bit of interest on deposits while the retail banks pay nothing. Gradually over the years, I have pared down my balances at the retail banks to the bare minimum for managing everyday living expenses and to maintain some minimums for some "perks". The rest is at the Treasury in FRNs and various maturities one month to two year.
A friendly reminder to we Tax Donkeys in high tax states like mine (California): all the interest is free of state income tax.
5
ForcedTQ
2022 Jun 14, 10:10am
Patrick says
Electronic I bonds: $10,0000 per calendar year
Paper I bonds: $5,000 per calendar year
I think the amount an individual is allowed to invest in an I Bond is limited, but the principle is indeed insanity.
If you can borrow at less than you can get, you have an infinite motion machine.
Electronic I bonds: $10,0000 per calendar year
Paper I bonds: $5,000 per calendar year
6
exfatguy
2022 Jun 14, 11:52am
So would it be better to wait to buy t-bills right now with interest rates seeming to be rocketing higher? Or start buying now and averaging up, taking regular profit every six, nine, or twelve months and reinvesting?
8
Eric_Holder
2022 Jun 14, 1:44pm
Eric_Holder
2022 Jun 14, 1:44pm
ForcedTQ says
Translation: peanuts.
Patrick says
I think the amount an individual is allowed to invest in an I Bond is limited, but the principle is indeed insanity.
If you can borrow at less than you can get, you have an infinite motion machine.
Electronic I bonds: $10,0000 per calendar year
Paper I bonds: $5,000 per calendar year
Translation: peanuts.
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