Question

Are US treasury bonds still considered safe?

Are US treasury bonds still considered safe?

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Answer #1

US treasury bonds are still considered relatively safest among most of sovereign nations. There cannot be 100% claim of safety on US treasury bonds but there are remote possibilities that US would default on its own bond payments. The risk would arise on US treasury bond when US decides for not honoring its own committed bond payments then that can be result of collective and conscious decision of US democracy and government.

In case US is in deficit then federal government has option to print new currencies or issue fresh currencies and settle its own obligation but such act results in inflation or super inflationary situation in country. Inflationary situation is better than defaulting on payments hence there are very thin chances that US would default on its own payments. Therefore, US treasury bonds still considered safe.

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