Alert: T-bills turn negative

Bob Wenzel over at www.economicpolicyjournal.com reports:

Dow Jones reports that January and February T- bills hit a yield of -0.03% earlier.

Got that? Negative .03%.

This is a very spooky sign. It means major players don’t want to go further out on the yield curve to earn money. They are only willing to keep their funds very liquid and pay for the privilege as opposed to earning money. This means one thing and one thing only, they are real scared about something. On a best case scenario, they are thinking longer rates are headed higher, so why invest now. On a worst case scenario, they are thinking all hell is going to break lose and they want their funds liquid to meet withdrawal requests.

As ZeroHedge notes, the last time Bill yields turned negative (in essence investors paying the Government to hold their money for them) was in the days after the Lehman bankruptcy.

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One response to “Alert: T-bills turn negative

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