Wednesday, October 19, 2011

How Bad Is Our Economy?

Over at the Treasury Department, you can plot real and nominal Treasury yield curves.  Nominal is the interest rate that the various Treasury bonds pay; real is what happens when you subtract the expected inflation to maturity.

Yes, that's right, unless you are buying Treasury bonds with at least an eight year maturity, you end up with a negative real yield.  Talk about an incentive to spend instead of save!  Here's where we were October 3, 2005, before the sky started falling:

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