Treasury Sells 3-Month T-Bills At 0% Yield First Time Ever

[cursichella1]

Anyone up for explaining the implications of this news item?

From Zero Hedge (http://www.zerohedge.com/news/2015-10-05/treasury-sells-3-month-bills-0-yield-first-time-ever) on 10/5/2015:


Treasury Sells 3-Month T-Bills At 0% Yield First Time Ever
Submitted by Tyler Durden
"Investors" are so desperate to hold on to short-term paper that they paid $100 for a 3-month Treasury-bill at today's auction. That is a 0% yield - for the first time ever - lower even than the auction right after Lehman's bankruptcy in Nov 2008.


http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/10/20151005_tbill.jpg

Chart: Bloomberg

It is probably safe to say that NIRP is next, followed by more negative yields further to the right of the curve, as the US gradually becomes Europe.

But don't worry: as Yellen admitted during her healthcare-scare speech, "nominal interest rates cannot go much below zero", just a little.

And another equally simple chart accompanies a complex article on same from the Wall Street Journal (http://www.wsj.com/articles/u-s-treasury-bonds-pull-back-1444052528). Much more than my brain is willing to attempt to decipher...

http://si.wsj.net/public/resources/images/P1-BV063_TREAS__16U_20151005211807.jpg

[Selkie]

Perhaps it means that a lot of people are thinking (hoping, actually) that WWIII is about to start for real?

[mgray]

See post 2 and 3 here (http://projectavalon.net/forum4/showthread.php?85823-Planned-bursting-of-the-financial-bubble)

[ThePythonicCow]

See post 2 and 3 here (http://projectavalon.net/forum4/showthread.php?85823-Planned-bursting-of-the-financial-bubble)

Yes - good stuff - thanks!

[ThePythonicCow]

Anyone up for explaining the implications of this news item?
The implied interest rate on US Treasury debt (the price paid now, for some promise by the US to pay a given amount in the future) is no longer, and has not been for a while, an indication of the time-value of honest money. Rather we are observing increasingly vast amounts of nominal wealth slosh about.

Like a fleet of sailing ships caught in a once in a century storm, up is no longer above down, the compass is spinning wildly, and the rigging of the sails is becoming increasingly irrelevant. The financial, monetary and economic measures and rules of thumb that we have guided our fleet by are being disemboweled.

:popcorn:

[mgray]

Anyone up for explaining the implications of this news item?
The implied interest rate on US Treasury debt (the price paid now, for some promise by the US to pay a given amount in the future) is no longer, and has not been for a while, an indication of the time-value of honest money. Rather we are observing increasingly vast amounts of nominal wealth slosh about.

Like a fleet of sailing ships caught in a once in a century storm, up is no longer above down, the compass is spinning wildly, and the rigging of the sails is becoming increasingly irrelevant. The financial, monetary and economic measures and rules of thumb that we have guided our fleet by are being disemboweled.

:popcorn:

Wow the imagery of the metaphor is spectacular, Paul.

In layman's terms it will cost you nominally to lend Uncle Sam money for three months. The monumental aspect is this is the first time a treasury instrument (T-bills and notes) in a duration greater than a month have gone negative. Yes 0 is negative in a bond offering.