If its because an American default is unimaginable, then that’s “presentism” - assuming that whats true today will continue to be.
If its because the US could just print its obligations, than Id argue that the Tbills are not risk free since one would only get the nominal value back
Yes, 5% over the last 12 years, which includes a, brief, collapse in spending. But!
Look at chart 1:
Apr2021 had 0.8% month to month
May2031 had a 0.6% month to month.
Which annualize ((1+i)^12) to: 10% and 7% respectively.
Or, a better estimate:
((1.008)*(1.06))^6=1.087
Or 8.7%
And, this doesn't include that most of the money printed hasn't been allowed to slosh around yet and instead are being used to prop up financial markets.
How are you so sure?
If its because an American default is unimaginable, then that’s “presentism” - assuming that whats true today will continue to be.
If its because the US could just print its obligations, than Id argue that the Tbills are not risk free since one would only get the nominal value back