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Tag: treasury

  • Dog Eats Money, U.S. Mutilated Currency Div. Steps In

    A wily, one-eyed golden retriever from Montana named Sundance ate five Benjamins ($500 USD) worth his owner’s money last year, and the Mutilated Currency Division of the U.S. Department of the Treasury replaced it.

    Owner Wayne Klinkel was eating lunch with his wife, when Sundance got into a car cubby and ate the bills. Klinkel, a graphic designer in Helena, said when he’d returned to his car, all that was left was $1, along with a telltale remnant of a hundred dollar bill. Klinkel declared that Sundance is “notorious for eating paper products,” and that he “knew right away what had happened.”

    Klinkel had rescued Sundance from an animal shelter 12 years before, and the dog had later lost his left eye to surgery. For days after the $500 lunch, Klinkel followed Sundance around in the snow, collecting the remains of the cash. He’d left the frozen remnants outdoors in a baggie, and after weeks of hesitation, Klinkel thawed the dirty money in some soapy water. Who knew to add the soap?

    Using a hose and a mining screen, Klinkel was able to isolate the shredded money fragments for reassembly. “It was sort of like putting the puzzle pieces back together,” Klinkel said. He then ran the taped-up bills over to the Federal Reserve in Helena, which in turn told him to take a hike.

    Klinkel was eventually referred to the U.S. Department of the Treasury Mutilated Currency Division, where he mailed the befouled bills with a notarized letter on April 15. “There was no guarantee I was going to get anything back,” Klinkel said.

    According to the U.S. Department of the Treasury Bureau of Engraving and Printing, when mutilated cash is submitted, a letter should be included stating the estimated value of the currency, and an explanation of how the money became mutilated. Each case is carefully looked over by an experienced mutilated currency examiner. The amount of time needed to process each case varies with its complexity, as well as the caseload of the examiner. No word on how all of this works during a government shutdown.

    Though, the treasury department offers reimbursement for some proven cases of mutilated money, but it might take up to two years.

    Still, Klinkel finally received a check for $500 in the mail from the treasury on Monday. Alas, no one at the treasury was available for comment, as all department representatives are furloughed.

    Image via Wikimedia Commons.

  • Bonds Continue to Rise, Making Investment Wise

    There has been much talk lately of a government shutdown, and for good reason. Politicians in Washington are still debating what to do about the looming debt-ceiling crisis, with Republicans still pushing for the defunding of Obamacare in order to make things work. The biggest loser in this battle? The stock market.

    Despite the high numbers reported for the month of September, the stock market has taken a blow, mainly due to the bickering in D.C. With the uncertainty of what decision the federal government is going to make concerning the looming shutdown, investors are starting to shed their risk-making policies.

    So, where are investors turning? Bonds. This week, bonds saw their biggest price gains since July 2012, with 10-year notes rising 4/32 in price and 30-year notes rising 7/32. The biggest investor in the US market, China, bought record amounts of US bonds and mortgage back securities in July, increasing its holdings by $20.2 billion.

    There are several reasons why so much attention is being given to the bond-market currently. First, bonds generally act inversely to stocks. Thus, when stocks are bad, bonds are good. With the continuing debacle over government shutdown in Washington continuing to affect stock-investors, investment in bonds makes sense.

    If the government was to actually shutdown, investment in bonds would be the best financial move possible. With shutdown comes no discretionary budget, meaning the federal government would have to stop expenditures on contracts, subsidies, and indirect payments to defense contractors and technology companies. This means lowered forecasts for said companies, and reduced stock activity. The thought of the US not paying its bonds debts would seem absurd considering how much government debt is owned by foreign countries, such as China (who currently owns $1.277 trillion).

    All signs also point to the fact that fewer bonds will be available in the future, mainly due to the drastic cuts in the deficit that have been made – from $1.089 trillion to $700 billion over the past year. If sequester spending continues, along with increased taxed, the deficit could be reduced even further, leaving fewer bonds available for purchase. As the law of supply and demand dictates, less supply and higher demands results in higher price yield.

    Bonds themselves have three main advantages. The first is that bonds represent capital stability. As previously stated, the government is not likely to default on its bonds payments anytime soon. The second advantage is that bonds offer more liquidity than other investments. The return for bonds on the secondary-market is essentially equal to the primary market. The last advantage of bonds is that they come with a fixed interest-rate that is locked-in for the duration of the bond. With the instability of the current US market, a stable investment makes sense.

    In short, buying treasury bonds today is as sure of a bet as putting some money on Barry Bonds was back in 2001.

    Image via Wikimedia Commons