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.


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...

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.