Subject: Re: The Berkshire Problem
T-bills have averaged 5.16%/year rate in the last 6 months.
A half year of that would be pretax interest of 2.58%.
After 21% corporate tax, that's 2.04%.
Inflation has been 3.00% in the same six months (not annualized).


Are you talking about US inflation? CPI in recent 6 months (December 2022 to June 2023) is actually only 0.2%; for the most recent 12 months, it's 3.2%. Media outlets always quote the year over year increase which is still above the target, but there's actually been less inflation in the last 6 months.
https://www.bls.gov/news.relea...

The current (July) CPI number is 305.691, and the January number was 300.536 (seasonally adjusted); July 2022's number was 294.628. https://fred.stlouisfed.org/se...

305.691/300.536 = 1.0172, so 1.7% (3.5% annualized), and 305.691/294.628 = 1.03755, so 3.8% for the whole year.

https://www.bls.gov/news.relea...

Your point still holds, inflation eats into taxable bond returns, but maybe not as much as your numbers indicate; it would be slightly (although almost insignificantly) positive now.

DTB