NYTimes: Inflation Bonds Are Sold With Negative Yield for First Time

[ElNono]

Inflation Bonds Are Sold With Negative Yield for First Time

By CHRISTINE HAUSER
Published: October 25, 2010

Inflation-protected securities sold at negative yields for the first time ever on Monday as traders anticipate that the Federal Reserve will start a new round of asset purchases.

Full article here (http://www.nytimes.com/2010/10/26/business/26markets.html?hp)

[Winehole23]

The market is pricing in inflation. For the offered reasons at least.





(Buy the rumor sell the news, right?)

[ElNono]

Sounds somewhat like a scam to me... How can you sell 'inflation-proof' bonds backed in currency that's directly affected by said inflation? The only way I think you could do that is by attempting to estimate what the inflation is going to be, which would be dabbling in witchcraft indeed...

[Drachen]

Sounds somewhat like a scam to me... How can you sell 'inflation-proof' bonds backed in currency that's directly affected by said inflation? The only way I think you could do that is by attempting to estimate what the inflation is going to be, which would be dabbling in witchcraft indeed...


TIPS (Treasury Inflation Protected Securities) are essentially floating rate bonds that pay a small premium + the inflation rate. It is adjusted yearly.

[Wild Cobra]

TIPS (Treasury Inflation Protected Securities) are essentially floating rate bonds that pay a small premium + the inflation rate. It is adjusted yearly.
Yep, it's the same concept as the bonds started in the Carter years. They guaranteed above inflation returns, and were a major part of the deficits during the Reagan years. These bonds paid double digit, and with compounded interest...

[CosmicCowboy]

They will just keep changing the goalposts on the CPI. They already exclude food and energy. Cheap Walmart shit from China drives the "new" CPI.

[Winehole23]

They already exclude food and energy.That shit still cracks me up.

Government reporting. Hah!

[Wild Cobra]

That shit still cracks me up.

Government reporting. Hah!
Their historical numbers are usually spot on, but their predictiva capability...

My God, this could easily lead up to worse deficit percentages than president Reagan had.

[Winehole23]

You're just gettin there now? lol.

[Wild Cobra]

You're just gettin there now? lol.
Me?

I have stated before the compound interest problem on the debt in the 80's. I was there long before.

[Winehole23]

I meant about Obama's deficit percentages vs. Reagan's. You just now realized that?

[Wild Cobra]

Sounds somewhat like a scam to me... How can you sell 'inflation-proof' bonds backed in currency that's directly affected by said inflation? The only way I think you could do that is by attempting to estimate what the inflation is going to be, which would be dabbling in witchcraft indeed...
It is just that. Voodoo economics.

Only the government can promise investors the stolen assets or our future.

[Wild Cobra]

I meant about Obama's deficit percentages vs. Reagan's. You just now realized that?
I don't see when you intended that.

Extrapolate for me please.

[Winehole23]

You brought it up.

[Winehole23]

I suppose you don't recall that too clearly now, do you?

[Winehole23]

lol

[Winehole23]

(happens to me too occasionally)

[ElNono]

TIPS (Treasury Inflation Protected Securities) are essentially floating rate bonds that pay a small premium + the inflation rate. It is adjusted yearly.

Measured by who?

Also, are TIPS purchases available to the general population?

[EVAY]

Measured by who?

Also, are TIPS purchases available to the general population?

yes. My financial advisor has been recommending them for about 6 months now.

[ElNono]

yes. My financial advisor has been recommending them for about 6 months now.

Thanks