"'Going negative' usually happens in politics, not the bond market. But one corner of the bond world has gone alarmingly negative lately. The real yield on five-year [TIPS] has turned negative for the first time since the Treasury Department started issuing the securities in 1997. Late yesterday, they yielded -0.026%, meaning the return investors get on these securities is a little less than the inflation rate. ... Inflation expectations are certainly rising. ... But it's too early to say the Fed is losing its inflation-fighting credibility", Mark Gongoff (MG) at the WSJ, 12 March 2008.
I have viewed TIPS as a scam from the first time they were issued. MG, are you serious about the Fed? Gold is $996, the Euro $1.56 and oil $110. Why do you think this is so?
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