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Thread: My economics teacher: Buy treasury bonds!

  1. #1
    Member John F Kennedy III's Avatar
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    Default My economics teacher: Buy treasury bonds!

    My economics professor just told all of us that we should buy treasury bonds. He said they are a good investment.

    HAHAHAHAHA!



  • #2

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    He's right. US Government Securities are a good investment.

  • #3

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    Quote Originally Posted by legion View Post
    He's right. US Government Securities are a good investment.
    They are the most expensive they will ever be and the interest payments are worth less every day. Sounds like a great investment.

  • #4

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    Quote Originally Posted by The Gold Standard View Post
    They are the most expensive they will ever be and the interest payments are worth less every day. Sounds like a great investment.
    I'm sorry, but I fail to see your point. What interest does gold pay?

  • #5

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    Quote Originally Posted by legion View Post
    I'm sorry, but I fail to see your point. What interest does gold pay?
    None, but you don't lose your principal either. With treasuries you lose value over time.

  • #6

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    Quote Originally Posted by The Gold Standard View Post
    None, but you don't lose your principal either. With treasuries you lose value over time.
    When my bonds mature I will get the principal back.

    Bonds are calculated so that the sum of the present value of the coupon payments, and the present value of the principal being paid back are always equal to the "par" value of the bond.

  • #7

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    Quote Originally Posted by legion View Post
    When my bonds mature I will get the principal back.

    Bonds are calculated so that the sum of the present value of the coupon payments, and the present value of the principal being paid back are always equal to the "par" value of the bond.
    Yes, good for you. How much will the principal buy when you get it back? Not as much as it did when you bought the bond. Even if you add in the pitiful coupon payments.

  • #8

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    Quote Originally Posted by legion View Post
    I'm sorry, but I fail to see your point. What interest does gold pay?
    None, but it went from around 1100 in 2009 to over 1600 now when you were 70% into US dollars.
    Quiz: Test Your "Income" Tax IQ!

    "No man escapes when freedom fails; The best men rot in filthy jails. And those that cried 'Appease! Appease!' Are hanged by those they tried to please." Author Unknown

  • #9

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    Quote Originally Posted by legion View Post
    When my bonds mature I will get the principal back.
    What happens to your principal in real terms if interest rates are substantially higher the day you get your principal back?

  • #10

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    Quote Originally Posted by legion View Post
    He's right. US Government Securities are a good investment.
    We need more guys like you. You give me a chance to load up.

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