Thursday, December 11, 2008

Free Money For Uncle Sam

Now I like my Uncle Sam as much as anyone else, but I am not about to make him an interest free loan, no matter how credit worthy he may be. Why would anyone make the government an interest free loan when there are FDIC insured CDs with positive interest rates? Is there no premium on the time value of money? Today's Wall Street Journal, "Treasury Bonds: When You Can't Bury Cash in Your Backyard," attributes the drop to firms trimming their end-year balance sheets with safe investments and the need for collateral.

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