> 4. The old treasuries decline 30-40% in present value. Oops, they're not so safe after all if you need your money back before maturity, which is often decades away.
This is not what safety of investment is, by any stretch of imagination. The yield of investment is nominal returns times weighted probability of that nominal return being lower. Government bonds are near zero risk of not being honored.
The risk you talk about is inherent in long assets + short liabilities and has very little to do with issuing body of the bond.
This is not what safety of investment is, by any stretch of imagination. The yield of investment is nominal returns times weighted probability of that nominal return being lower. Government bonds are near zero risk of not being honored.
The risk you talk about is inherent in long assets + short liabilities and has very little to do with issuing body of the bond.