Watch your cash. Negative yields are here.
MsMorrisine
Posts: 33,091 ✭✭✭✭✭
I just saw on CNBC that the yield on the 1 month and 3month tbills went negative.
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my money markets are all paying greater than 1%. I don't see them ever going negative, at least until the banks don't need my money to make bad loans.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Yup...3 month went to -0.02%
1 month is at 0.01%
Money markets are usually 1-3 month tbills, so derryb, your money market will go to close to 0%.
Only a year ago we were at 2.4% on 3 month. And things were good. Why didnt "they" listen to me.
Knowledge is the enemy of fear
They?
Yes, they. That amorphous collective that is out to get "us".
Lol
Knowledge is the enemy of fear
So ... high quality short term bond funds (eg, avg maturity about 2 years) are yielding roughly 1 %. Is it worth the risk?
Nope...so fish from the other side of the boat.
Knowledge is the enemy of fear
Chicken eggs are king, Gather on!
The whole worlds off its rocker, buy Gold™.
I don’t understand why some CDs are still paying almost 2%. I even picked up a few, not that long ago, for 3.4-3.5%.
That rate was common in Dec 2018.
Knowledge is the enemy of fear
CD rates will be coming down as soon as the bank can get it from the FED cheaper.
CD pays higher rates than other bank services because the money is tied up. It's theirs until maturity. Money market can be closed at any time.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
When they see the need to tell you not to worry it's time to worry:
The FDIC insurance fund is less than $100 billion. In 2015 US banks held over $10 Trillion in deposits. Doesn't take a mathematician to understand that the FDIC, while capable of covering the small bank failure here and there, exists primarily to provide a false sense of security. Don't worry, they've got your back.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
do not confuse negative yields on bonds with negative yield on bank interest rates. Bonds are going negative because investors who are flush with cash are choosing their safety over what they consider risky banks. They are more concerned with safety than they are with returns.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The FDIC has an unlimited line of credit with Congress. There are no worries on this matter.
Knowledge is the enemy of fear
unlimited line of credit with Congress? More of that Magic Money Tree? LOL
Sorry, but there is a limit to reality.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
money markets buy treasuries
Debt and the boiling frog analogy comes to mind. I'm sorry for the younger generations. End the Fed.
I knew it would happen.
Or frog in the blender.
Wow... those poor frogs...they take all the punishment
Boiling, blending and crossing the road - oh wait, I think that was chickens...but frogs cross the road too.... 
What a mess....Cheers, RickO
I remember one time there were so many frogs on the road that you could hear pop pop pop as you ran over them.
Print lotsa money...dump it out of helicopters...no inflation!
Are these good times, or what?!
Here's a warning parable for coin collectors...
My 3% 1 Yr. CD's came due and are now 1.25% and money is falling from the sky. Strange days.
100% Positive BST transactions
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Knowledge is the enemy of fear
Cash is the king, inflation is the queen and gold is the consort. Sounds like a royal flush.
the helicopters bring price inflation. They put the money directly in the consumers' hands. More dollars competing for the same amount of goods and services = higher prices.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Try being named Pete- always being robbed by Paul, having things done for your sake, having a principle for getting promoted ahead of your skills.
@3stars .... Let me add to that one....
Cheers, RickO
Friends may come and friends may go...
and friends may peter out you know,
But we'll be friends through thick and thin,
Peter out or Peter in.
I noticed food prices going up. Paper products wayyyyy up. Hope this is temporary. But I am not so sure.
100% Positive BST transactions
I always liked Pistol Pete Maravich. I still watch some of the videos to watch him play. Awesome basketball player.
I knew it would happen.
"Pistol Pete" Maravich's Greatest NBA Game Ever! 68 Points vs Knicks!
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
she's from eastern europe ?
She's CoHo's insurance agent.
If you listen closely, she's telling you there is a panic for cash.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Does anyone on this board believe there is a material risk of losing (nominal) money in an FDIC insured account?
There is great risk if there is ever a run on the banks or the failure of one or two major banks. The fact that the FDIC chose to release their "video of reassurance" on March 24, tells me they saw an increase of risk, most likely on a bank run.
FDIC insurance is a publicity stunt to hide the fact that banks are very heavily over leveraged thanks to fractional banking. It is false reassurance that you should never worry about the same banks that brought us to the edge of the cliff in the last crisis. What do you think would happen if everyone realized that only 10% of their money was actually being held by the bank? The FDIC stunt is designed to make that question appear to be irrelevant.
Banks are allowed to loan out 90% of YOUR deposits. Think about what that means in terms of "cash on hand" if enough people show up wanting 100% of their deposits. I refuse to drink the kool-aid on this one, as it could easily become a game of musical chairs where there is only one chair for ten account holders (assuming they all have the same in deposits). Bank runs can occur as swiftly as shortages of toilet paper.
Since the great bail-out of banks in 08-09 by taxpayers, changes were made to make creditors (account holders/DEPOSITORS) take the hit to rescue the bank with a "bail-in."
Lessons from Cyprus.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
So when are these negative rates taking effect?
who knows.
I haven't seen the 1 month and 3 month yields on cnbc for days. i imagine that is because they are positive again.
the real threat of lower to negative rates is on money market funds.
My money market interest in an IRA posted today with about half of the previous month's interest payments.
With the increase in the inflation rate, you are officially in the red.
1 month is 0.03 and 3 month is 0.09.
Knowledge is the enemy of fear
In my 401k account, they are no longer allowing new money into the MM. But they do offer a managed 1$ fund that has 0.2% annual fee.