At Low, Low Rates!


Posted on : 9/22/2011 07:06:00 AM | By : Dann | In : , , ,

Via Zero Hedge, and all of the unquantified credibility that the anonymity of the site suggests.

The group wondered aloud why the Treasury and the Congress were not being more opportunistic. Rates are at historical lows. Why aren’t we issuing 50 year or even 100 year treasuries? At these exceptional rates, that would allow us time enough and room enough to put the debt in order - a chance to structure the debt hodgepodge in an almost logical manner. It would give us a chance to hand off to our children something far less burdensome.

More ice cubes were marinated and the brain trust (ex me) concluded that the primary deterrent probably was that going to a 50 or 100 year might raise interest costs somewhat. That would yield, quickly, to political finger-pointing.

So, here it was again - politics. I don’t want to be accused of “busting the budget” by auctioning something that yields several basis points more. “The kids? The hell with the kids! They ain’t voting in this election.”
 I do not know if this conversation ever existed, but I think the idea is reasonably sound.  We use short term treasuries to access much lower interest rates.  But now long term interest rates are lower than short term rates were a few years ago.  Doesn't it make sense to lock in the low rates now?

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