Personal Finance and Investing

There won't be any default because too many powerful people know what that would mean. If the US Treasury were to default on even a single series of ANY Treasury paper, the results would be catastrophic and world wide.

Ever heard the term "Risk free rate of return"?

Many, MANY financial calculations and benchmarks use this term and it's underlying security.

Want to know what the worldwide accepted security is that establishes this rate?

The United States ten-year note.

Why? Why the ten year and not a 2 year? Or the 90 day or the 30 day or the 30 year?

Because it is a substantial bond that pays a coupon. Anyone can borrow money for 30 days and pay it back. Ditto 2 years. Not everyone however, can do it for 30 years. But ten, as Goldilocks said, is just right. It is a substantial length of time but not too long. The bonds pay a significant interest payment and the bonds are redeemed at par when they mature. Treasury debt paper is also one of the most, if not the most liquid securities on the planet. All Treasury bonds settle "Same Day" as opposed to "Trade plus 3" like almost everything else.

If the Ten Year is safe, then so are your 12 month bills. Your ladder of 12 month T-Bills are just about the safest securities you could own.