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Chris Hladczuk
Thu Sep 15 2022

Give Me Uncle Sam Paper Please.

I’m begging you not to fall asleep right now.

“Wait, what I love reading about Treasury Bills!”
- No one ever

Yes I’m sorry to say that I’m here to tell you about good ole fashioned Uncle Sam Paper (aka United States Treasury Bills or as the cool kids say “T-Bills”).

This piece will tell you what these things are. How they work. The big apocalypse “risk”. And why it’s so annoying to buy them (until a cat company figured it out).

But most importantly, I know T-Bills aren’t super sexy so we’ll keep it short(ish).

So without further ado… let’s do this!

Wait, what's a Treasury Bill?

Let’s whip out good ole fashioned dictionary dot com:

“U.S. Treasury Bills are securities issued and backed by the ‘full faith and credit’ of the federal government.”

I almost fell asleep reading that.

But let me translate the jargon:

  • The United States government needs money
  • They don’t get enough money from taxpayers like you
  • So they need more money

How do you create magic money out of thin air?

You sell an IOU to people and businesses called U.S. Treasury Bills.

Uncle Sam pays interest so people don’t keep cash collecting dust in a checking account or underneath your mattress.

These bills can be in 1-month, 3-month, 6-month and 12-month time horizons. 1

Meaning if you put 10 million bucks into a 12-month treasury bill…

12 months later Uncle Sam gives you back 10 million bucks + your 3.92% interest! 2

So you just made $392,000 and the U.S. Government could spend more money on stuff.

Not too shabby.

Now you’re probably thinking, what’s the catch?

“When something is too good to be true, it usually is.”

I totally agree with you… let me dream up the risk scenario for ya.

The Apocalypse Scenario

So the United States Government has been kicking since 1776 when a few crazy 20 somethings risked it all.

Since then, we’ve been on quite the run. Fought some wars. Got a lot bigger. Made some mistakes. Had some victories.

And became (arguably) the most powerful country in the world.

250 years later, the United States is very different.

But back to our example.

You are buying debt from the US government… what are your risks?

You don’t get your money back if the United States Government fails.

And the US Government has never defaulted on their debt.

And if that happens, we have much bigger problems on our hands like global economic collapse.

Ok, so we’re going to lock up some dollars in Fort Knox. How do we do it?

OMG How Can I Buy T-Bills?

You know what’s awesome? Paper receipts. 2007 Outlook emails. Government websites that look like they haven’t been updated since 1996.

I hope you can sense the sarcasm.

But this is the simplest way to buy a T-Bill today:

It’s about as easy as getting a root canal done while eating ice cubes.

“That’s ridiculous. I don’t want to become a T-Bill trader, I just want to make hundreds of thousands on my company’s idle cash without all the work.”

Ah, again… I agree with you.

Meow has a solution :)

And we have a dashboard that makes it so simple to plop cash into that my 5 year old cousin could figure it out.

I mean who doesn’t want to pick up cash with only a few clicks?

Okay, I got to go now my boss is telling me to get back to building.

But you can shoot me an email chris@meow.co if you want to talk about t-bills for your business (or general treasury management).

See ya.


1 Other time horizons exist but I won’t bore you with the details

2 When held to maturity; current 12-month T-Bill rate as of Sept. 14, 2022 is 3.92%

Securities investments: Not FDIC Insured - No Bank Guarantee - May Lose Value - Are Not Deposits. Meow is a financial technologies company, not a bank. Meow partners with Jiko Securities, Inc., a registered broker-dealer, member FINRA, SIPC. All T-Bill investments will be made by Jiko and held in a brokerage account for each individual client. This communication is not an offer to purchase or sell any security. Jiko, owned and operated by Jiko Technologies, Inc., makes available a unique combination of financial services provided by Jiko Technologies, Jiko Securities, Inc., a registered broker-dealer, and Jiko Bank, a division of Mid-Central National Bank, Member FDIC.