So much government debt! But what's the difference between the Treasury's bills, notes and bonds? Paddy Hirsch explains. #MarketplaceAPM #EconomicExplainers Subscribe to our channel! / marketplacevideos
Thanks, this is 2020 March19. And your words are ringing so true...."almost certain there will be liquidity, almost certain the USA economy will be strong"....wait! Oh shit, we have a problem Houston!!!
Thank you for your video. I'm majoring in finance at the moment and the way my lecturer explains it is so confusing. This has made it so much easier for me to understand. So thank you :)
If you really want to piss off your professor, show how gov't debt gets issued at the NPV (net present value) of the currency, and then how the creation of the debt itself, the debt the recipient just bought, through the cantillion effect, results in the gov't paying you back pennies on the dollar compared to what you paid for (currency debasement). Then ask how exactly gov't debt is different from a giant Ponzi scheme. They love that. If they try and counter by referencing CPI and GDP numbers, let them know you have a bridge in Brooklyn you'd love to sell them if they believe those numbers.
Hahaha! And Me watching this in the final approach to *Q4* *2022* to see if it's still worth it to buy anything from our gridlocked Government. At least we're still holding out better than _The EU._
Well done. But where do the bonds trade in the market place? How do I actually sell a physical bond that I hold ? Where do I store the bond ? Is it insured? Is it all online ? Sorry for all the questions trying to learn here...
Adam Metzker Good questions. There is no exchange, like a stock exchange, where you can go to find a market for your bond. Bonds are traded "over the counter" . You need to find a buyer, or a broker who can connect you to a buyer. You can buy bond insurance from a bond insurer. You can get a paper certificate for your bond and keep it in a lockbox. Or you can use a brokerage and keep it in electronic form.
Problem is the Amount due the CC Account is really due the Minor / principle / Estate account. The CC holder isn't the debtor, The CC Account holder; the Bank is. New money was created when the bank applied the credit to the credit card purchase. The bank is liable to repay that public debt (application of credit) not the card holder.
Excellent video. Can you please explain how does the government pay back the securities, that too with interest? What is the source of the government's income? Thank you.
Who in the hell thinks buying debt from a Government that's now about 20 trillion in debt (not even including unfunded liabilities) is "secure"? Especially considering they now have to borrow more to pay off these debts from borrowing before. Either way, great video, I just discovered your channel, looks like there's a lot of great info. Keep it up! Ha! Started writing this comment before the end of the video, looks like you mentioned my concerns.
+stayanddrown Its because the Government cannot fail...if the government fails the entire system fails...Thats why financial institutions are taking risks, because government bails them out , because they are a necessary entity. If the entire economy collapses, we might see world war 3 because war is the only way to destroy debts owed, thats what happened in world war 2.
Thanks for the video. It was informative and to the point. The only eyesore (for me) was the 30 year Treasury bond being priced at 2% and the 7 year notes priced at 3.5%. Generally the higher the duration the higher the yield. (Shouldn’t our default assumption be a rising yield curve?)
Sorry I am ignorant to all this I have a document from 1925 that says Bond on it from my great grandparents wondering if its worth anything or its just a document ?
Could someone please explain more about the interest? How is it fixed for bonds and notes but not bills? If you are buying it at one price and selling it at another, isn't the interest always fixed??
A bond and a note over a 10 year period and a 5 year period you will get a regular coupon say every 6 months or a year. When you buy the bill because the period is less than 12 months or 6 months or whatever you will get your return by buying the bill at a discount, because your not going to get a coupon within that period. Once the bill matures at face value thats your return.
Hey Paddy, but if things are that simple, why I should take bonds over notes? I could get my capital sooner and at a higher interest rates: am I wrong or it violates somehow the first principle of financial math? A dollar today worth more than a dollar tomorrow (for that you should pay me something for the disposal). Would be great to know why! Thanks! ;)
If bonds are constantly being traded on a very liquid bond market, doesn't their price fluctuate? So when you sell, you may actually get less (or more) than you paid for them!
Does this seem like a good investment for a younger individual, sure it is safer than the stock market, but it doesn't seem like it's much better than putting your money into a bank with an interest rate similar or greater than the rate the bond/bill/note goes for. If anyone has any information be sure to respond, I'm interested in hearing feedback.
Well if you can get a better interest rate from an FDIC insured bank deposit you would be better off. Depends on if you are interested in locking in a rate for long term.
