WASHINGTON (AP) - Interest rates on four-week Treasury bills fell to zero Tuesday, as investors still sought the safety of government securities without any return on their investment.
That kind of says it all.
Investors are scared and feel the U.S. government is THE safest place to keep their money. That means lots of competition to buy the Treasury bills (bonds), which pushes the price up. Up so high, that in this case the government doesn't have to offer to pay any interest to get people to buy them.
Our editor here points out that back in 1981, if you lent the government money for three months' you'd get paid 14% interest.
Rest of the story after the jump.
The Treasury Department said it sold $30 billion in four-week bills at an interest rate of zero percent. That meant investors were willing to earn no return at all on their money as long as they could park it in the safety of Treasury securities.The rate was down from an interest rate of 0.04 percent at last week's government auction of four-week bills.The zero interest rate for the four-week bills was an all-time low dating back to July 2001 when the government began issuing them.Reflecting high demand, the amount in bids for the four-week bills was four times the amount sold at the auction.