When you are investing in treasury bonds, you are essentially lending money to the government that issued the bond. Treasuries are considered to be a safe haven in times of economic crisis because riskier asset classes like equities usually gets hammered downwards. Of course, there are treasury bonds that can default if the countries are facing bankruptcy like Greece and Portugal but the flight to safety is usually to an excellent rated bond like the US bond.
It is interesting to note that just a couple of months ago, the US Fed was bullish about their economy and inflation target and they were upbeat about raising the interest rate. This sends the treasury bonds yield upwards upon announcing the news. A couple of months now and it is incredible to see where we are on the treasury bonds. With the ongoing crisis happening across the oil sector, China landing as ......