Why a glut of Treasuries and other "risk-free" investments could be an even bigger problem for the economy.
The safe-asset shortage is over. Should we worry?
A safe asset is any asset that you can sell at any time and be sure to get your money back. That often means short-term government treasuries or bank deposits. Hence, when demand for government-issued securities outstripped supply, economists called it the “safe-asset shortage.”
The phrase “safe asset” may sound boring — more speculative assets like Bitcoin and derivatives on Tesla Inc. stock seem sexier — but safe assets are the most important, and perhaps in some ways, the riskiest assets on the market.
Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
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