This week, 3 month U.S. Treasury Bills had an interest rate less than 0%. This is the first time rates have gone below 0% since the U.S. started selling the debt in 1929. The reason for the 0% rate is investors have lost confidence in other types of investments and see Treasuries as the safest place for their money.
All of this is happening while the Treasury is increasing supply which should be producing higher interest rates. Fundamentally, prices should be falling and rates should be going up. At some point, the trend will reverse and Treasury bond prices will fall either because there are too many bonds, investors believe the economy is getting better, or international bond holders sell U.S. Treasuries to fund their own economies.
The economy will not stay in the doldrums forever. Start your search now for areas that are beaten down and that offer higher interest rates. The stock market will turn around before the economy does (See post from December 10th).
Cutting Costs
Many people are looking for ways to cut costs. One thing to consider is raising your deductible on your car insurance. If you have a $200 deductible on your policy, raising it to $500 could reduce the cost of collision and comprehensive coverage by up to 30%. Raising your deductible to $1,000 could lower your premium by 40% or more, according to the Insurance Information Institute. Just make sure you have enough money put aside to cover the higher deductible amount in case you're in an accident.
If you are in the market for a new car consult your insurance agent before you buy a car or truck. Premiums vary significantly from one type of car or truck to another. Insurers review several factors, including repair costs, the likelihood the vehicle will be stolen and the model's safety record.