10-Year Treasury Note

  

Categories: Investing, Bonds, Insurance

Government paper, or bonds, which pay interest twice a year like normal bonds, and then boringly come due and pay off the principal that the U.S. government borrowed. Remember that, when the government issues tons of paper, i.e. sells lots of bonds, it raises cash for itself, sucking cash out of the system, sucking liquidity from the system... and vice-versa.

Related or Semi-related Video

Finance: What are Government Bonds?52 Views

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finance a la shmoop. what are government bonds?

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now we're gonna narrow this question a bit and declare these bonds to be US [hands shape the question]

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government bonds. our answer would be a tad different if we were discussing

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bonds backed by North Korea Nigeria or Egypt so US government bonds come in a

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few flavours. generally speaking they range in duration that is how long it

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takes for them to mature and the principal get paid off. short-term US

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government paper it's a fancy term for a bond ,refers to things that come due in a

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year or less. that's short-term. year or less. and then there are Treasury bills

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which come in a variety of durations and our price like this note how different

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these look versus just you know buying a bond .but when you buy a bond it has a [chart shows prices]

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face amount of say a thousand bucks for what is called its par value. that piece

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of paper might agree that clown shoes incorporated which is where most

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congressmen get their Footwear of course, will pay 30 bucks twice a year to the

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holder for 10 years, and then pay back the original thousand bucks invested

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it's like a normal vanilla bond, the interest rate here in this case is 6%

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per year, but many US government notes are sold at auction which means they

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sell at a discount to their par value. well regardless of how they're sold US [auction with a clown in attendance]

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government bonds are backed by what is generally perceived in the world as the

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most certain or secure financial backing. even more powerful than Google .if sorry

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Larry and Sergey we're just keeping it real. the bonds are backed specifically

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by the US government's right to tax its citizens. and oh they tax us. do they ever.

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so now you can stop wondering about that bottomless hole a third or more of every

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paycheck vanishes into. [portion of paycheck flies down dark hole in the ground]

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