Saturday, November 8, 2008

Unsafe Haven

"Amid the flight to safety, yields on government securities have plummeted. But there's at least one safe haven that's still paying attractive yields: inflation-linked savings bond, or I Bonds. Starting next month, the yields on these bonds are expected to rise to nearly 5% for at least six months.", Jane Kim at the WSJ, 28 October 2008.

I see no safety here. Buying inflation-linked bonds when Uncle Sam determines the inflation rate makes no sense to me.

4 comments:

Edgar Alpo said...

TIPs are a ripoff, they calculate it using lying gubbermint numbers. There is no return anywhere, I keep it all in cash.

Anonymous said...

I'm with Edgar on TIPs... how do we get a good privately derived inflation number?

So much dumb advice for little investors on bonds... it's dark and they're clueless... nobody helping em.

Independent Accountant said...

Anonymous:
John Williams at shadowstats does as good work in "private inflation accounting" as anyone.

Anonymous said...

IA... thanks for the pointer to John Williams... good stuff.