HACKER Q&A
📣 eatonphil

Why isn't there a push for able Americans to buy bonds?


If federal, state, and municipal governments are concerned about wracking up too much debt while considering relief funds, why aren't able Americans being pushed to buy bonds?


  👤 wsh Accepted Answer ✓
I’m not sure I follow the question: when you buy a bond, you’re lending money to the issuer, increasing its debt.

There’s no shortage of buyers for government securities, anyway. In yesterday’s auction of 28-day U.S. Treasury bills [1], for example, the bid-to-cover ratio was 2.75, meaning that the total of the bids was 2.75 times the face amount of the securities actually sold, and the highest interest rate the government had to agree to pay, to borrow as much as it wanted in that auction, was only 0.091%.

[1] https://www.treasurydirect.gov/instit/annceresult/press/prea...


👤 ipnon
Let's say every American bought $100 of bonds today. That would be $33,000,000,000 or 33 billion dollars of bonds. Next, take a look at the daily volume of bonds traded on the financial markets. There is no need for another drop in the bucket.

👤 rdtwo
They are, what do you think the FED is doing when they push interest rates to the foor? They make investors chase risker and risker assets/bonds to get the same interest rates. Rates on junk bonds have been pretty low and risk on government bonds even lower. This bankrupts savers in the long term but nobody cares about them.

👤 giantg2
Because while many people are stupid, they aren't that stupid.

You would have a better chance of making money following r/wallstreetbets, because there's no way you can make any money on those bonds. (To be fair, you could also loose everything in wallstreetbets)