OK, safe assets are mostly federal government bonds and seem to be in short supply, so rates are low. The Federales get top dollar when selling their bonds.
Dave Beckworth wants to know why more people want safe assets then there are safe assets. The answer is because they are safe assets, a low probability of default. In a risky world there will always be a shortage of safe assets because all the people cannot be safe all the time.
Some economists say the Swamp can issue all the debt it wants, it owns he printing press. Not true, risk is real, we can transfer it, or eliminate some of it, but risk predictors will outsmart the government printing press every time.
Risk has increased because dollar flow is more volatile. The volatile flow results when interest payments become a large part of the money flows.
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