A 50 year bond by Fed?

[rishab dhar]

http://www.cnbc.com/id/44426451

 

[bob]

They should just give it up and issue perps.

 

[Lyosha]

They should just give it up and issue perps.

Those will eventually turn into a housekeeping nightmare imo... maturities are important because you want a concrete point at which the thing dies and you no longer have to stop keeping track of the at that time penny-sized payments.

 

[Ohad]

Those will eventually turn into a housekeeping nightmare imo... maturities are important because you want a concrete point at which the thing dies and you no longer have to stop keeping track of the at that time penny-sized payments.

It's actually easier to track a perp than issuing/maturing bonds over and over, wouldn't you agree?
Penny sized payments? perps usually have higher yield than regular bonds due to the lack of maturity date so what did you mean by that?

 

[Ohad]

What I mean is that inflation ultimately wins.

I wouldn't agree with your initial statement. Perhaps if given a choice between a perp and constantly issuing annual bonds, maybe...

Well since in reality every country have a debt and bonds than issuing and maturing bonds is a constant reality everywhere.

If you think about it, perps have lower costs, you can buy them back on the market or set plenty of buy back dates and you can just issue new ones from the same series.

In terms of legal/accounting fees I think that they are probably much cheaper to maintain (this is based on assumption I never issued one )