'It is a really horrendous idea for a country that is running massive deficits. We are already setting our descendants up for conflict in order to achieve current political aims. The last we thing we need is to do more of that.'
But have you thought it through? Consider this, the average spread between the 3 month and the 10 year treasury…
'It is a really horrendous idea for a country that is running massive deficits. We are already setting our descendants up for conflict in order to achieve current political aims. The last we thing we need is to do more of that.'
But have you thought it through? Consider this, the average spread between the 3 month and the 10 year treasury is 1.5 percentage points since 2000. Once we get back to this level the government could just borrow at 3 months and buy their own 10 year treasuries back making a 1.5% spread with no risk. If they borrow enough money would could entirely fund the government with this arbitrage!!!
'It is a really horrendous idea for a country that is running massive deficits. We are already setting our descendants up for conflict in order to achieve current political aims. The last we thing we need is to do more of that.'
But have you thought it through? Consider this, the average spread between the 3 month and the 10 year treasury is 1.5 percentage points since 2000. Once we get back to this level the government could just borrow at 3 months and buy their own 10 year treasuries back making a 1.5% spread with no risk. If they borrow enough money would could entirely fund the government with this arbitrage!!!