Thursday, November 19, 2009

Is the Safe Haven called Government Bonds really so or instead eating into our investments while fooling us into believing its safeguarding our investments?

Are we robbed of our investment by investing money into the Government bonds, lets take the example of the US Government and see whether investing in Government Bonds is protecting our Capital or not (Most other Governments of the World fall in the same category, but it is the US Government which has been caught first). The US government issues Long Term Treasury bonds for common public, Foreign Investors & Sovereign Institutions, but now due to lack of demand for the huge record amounts of debt issued by the United States government, the US Federal Reserve is planning to buy more than $1 trillion in debt, which is like a taking loan by one hand and printing note by the other hand to giveback the money, means creating money out of thin air, now this money when it reaches the market it causes Inflation as I have explained in my previous post http://niftywhatcanhappen.blogspot.com/2009/11/what-drives-inflation.html

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