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Old 03-01-2015, 09:10 PM   #21
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Can you elaborate on this? The $40 in my wallet doesn't spawn pennies (that I've noticed).
Of course it depends on where you store it!
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Old 03-01-2015, 10:02 PM   #22
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Cash is not a bond. Cash does not pay interest. Cash is part of the M1 money supply, the rest being deposits.

You guys would make my finance professor cringe.


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Old 03-01-2015, 10:24 PM   #23
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This time it's different?


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Old 03-02-2015, 12:22 AM   #24
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No. Cash pays interest. Some even pays 1%.

Cash has no credit risk or interest rate risk or maturity, or possibility for capital gain, so you can't model it as a bond.
Its maturity is immediate. And of course a country could devalue its currency. It has happened.


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Old 03-02-2015, 04:03 AM   #25
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Its maturity is immediate. And of course a country could devalue its currency. It has happened.


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OK, I regret responding to the first assertion. Never mind......
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Old 03-02-2015, 05:37 AM   #26
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Cash and fixed income are not the same, and the difference isn't yield. Cash is what you hand over, in exchange for fixed income, which is a promise to return cash at a future date. They are separate asset classes.
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