Remember how I keep banging on about the three month T-bill at virtual zero yield being a serious thing? Remember how this humble corner of cyberspace is long GLD because of that miniscule yield and what its consequences imply (two recent examples linked here)? Well check out what Paul Krugman blogged last night:
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November 20, 2008, 7:15 pm
Don’t panic about the stock market
Panic about the credit markets instead. Interest rate on 3-month Treasuries at 0.02%; interest rate on high-yield (junk) bonds over 20%.
This is an economic emergency.
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Unsurprisingly and quite rightly, nobody gives a rat’s trasero about Otto’s shrill voice, but when a heavyweight speaks, people listen. Here’s spot gold this morning:
You go girl.