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MICHELE NORRIS, host: This is ALL THINGS CONSIDERED from NPR News. I'm Michele Norris.

MELISSA BLOCK, host: And I'm Melissa Block. Today was a record day in the financial markets, but we're not talking about stocks. The U.S. government sold 10-year Treasury notes at the lowest interest rate ever, 2.14 percent. That means, despite the downgrade from Standard & Poor's, there is more demand for U.S. debt than ever before.

Basically, people around the world are so fearful about the global economy that they're rushing into the safest investment there is: Treasuries. Robert Smith from NPR's PLANET MONEY Team was listening in on today's auction.

ROBERT SMITH: Everyone always talks about buying a Treasury bond, but you aren't really buying something. A person who holds a Treasury bond is lending money to the U.S. government. The U.S. government does hand you something back. They call them T-bills or notes or bonds, but those are fancy names for IOUs. To own a Treasury is to own a promise from the United States that you will get your money back with a little interest. Just how little interest gets determined almost every day in a room in the U.S. Treasury building.

DARA SEAMAN: The auction room in comparison would be like the average size of a living room in a single family home.

SMITH: I'm talking with Dara Seaman, who is with the Bureau of the Public Debt and it's just a minute before 1:00 in the afternoon, before today's auction of $24 billion in Treasury notes. And when we say auction, it's not exactly what you might think. Instead of bidding up the price, they're bidding down the amount of interest they're willing to pay and there's no fast-talking guy pointing into the audience. China bids two and half, two and a half. Can I get two and a quarter?

SEAMAN: Yeah. We're not as exciting as that. We don't have a chanter. All our buyers aren't seated in one physical place. For us, everything happens electronically.

SMITH: What is about to happen may be the single most important financial transaction in the world: a U.S. Treasury auction. In this final minute, giant investment firms around the world are sending in their bids and they're telling the U.S. government how low they are willing to go to buy a little slice of U.S. debt. And yet Dara Seaman's job is to make this moment so predictable, so boring that the world doesn't freak out.

SEAMAN: That's how we like it. We don't like any market surprises and we don't like any drama going on with the auction, so when it's boring, we're happy with that.

SMITH: Now, wait. My clock says there's three seconds to go. Is anything going to happen right now?

SEAMAN: We have a countdown clock so everybody knows the time has run out. We have...

SMITH: I'm going to stop it right here. While Seaman is talking, she's watching history being made on her computer screen, but she's so good at being calm, she doesn't even let on. The computer is calculating the interest from this auction and it shows that people around the world are so desperate for these Treasury notes that they are willing to accept the lowest interest rate ever, 2.14 percent. That's less than inflation. Investors are basically paying the U.S. government to hold their money. So is there any reaction in the auction room? Any whoops, cheers?

SEAMAN: Well, there's definitely smiling going on. When we have a good auction, everybody's happy.

SMITH: Because the lower the interest rate, the more money the taxpayers save. But more importantly, that interest rate that came out of the auction becomes a new benchmark for the world. U.S. government bonds are considered virtually risk-free and a sort of baseline. When U.S. bond rates go down, other types of loans get more affordable too, from mortgages to student loans. Money, the auction tells us, is cheap and easy. Robert Smith, NPR News.

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