Why not consols?

Nominal interest rates on US government debt are at historical lows.  Today's Treasury yield curve data shows the following: The longest maturity bond the federal government currently issues is 30 years, with a yield today of 2.22 percent.  With an inflation rate of 2 percent of less, this means the federal government can borrow at a real rate close to 0 (zero) percent. For five years, … [Read more...]

Inflation! Debasement! May edition

Hyperinflation-era German currency Source: Flikr Creative Commons Welcome back to the monthly inflation! debasement! update.  We’re keeping track of that nefarious phenomenon of which Speaker of the House Paul Ryan warned that, no matter what the data tell us, accelerating inflation and a depreciating currency are just around the corner.  Here are the latest data through May 2016: … [Read more...]

No, we shouldn’t go back to the gold standard

Source: Flikr Creative Commons I usually wake up to the sound of NPR's Morning Edition. Today, I got a rude awakening hearing the story, "Trump Favors Returning To The Gold Standard, Few Economists Agree."  Jim Zarroli does a nice job presenting the issue in a calm, "on the one hand, on the other hand" manner. I'll be more blunt: going back to the gold standard is a terrible idea.  I wrote … [Read more...]