Invite ye felawes and frendes desirous in gold to enter the gates of Shrewd'm, for they will thanke ye later.
- Manlobbi
Halls of Shrewd'm / US Policy
No. of Recommendations: 12
Paul Krugman: "If the Trump administration succeeds in politicizing the BLS, TIPS won’t be protected against inflation. They’ll only be protected against inflation the administration is willing to admit is happening. Have investors thought through the implications?"
No. of Recommendations: 5
"Have investors thought through the implications?"
I have definitely weighed the near certainty of the corrupt Trump admin lying
about the inflation rate. I pulled the trigger on 1 10 year TIP recently, but doubt
that I'll be purchasing a 5 year TIP later this month when they go to auction.
My cloudy crystal ball says rates are going to go as close to ZIRP as Trump's crony's
can force them to. Fixed income investors gonna get hosed, just like in the not too
distant past of 0.25%-1% rates "offered" savers after the GFC. But Wall St luv luv luvs
ZIRP, so equities might be a better bet. But I've invested long enough to see the rug
get pulled out from equities, so no way I'll be 100% all in on stocks anymore. But
the fixed income portion will suck, no doubt.
No. of Recommendations: 3
"Have investors thought through the implications?"
Keeping rates near zero will be an expensive proposition.
To do that, the treasury will have to sell bonds- lots of them, in a market where nobody wants them because interest rates will be low, so who will buy them? Why of course! The government! Quantitative easing 2.0!
But the hamster on the hamster wheel will have to run faster and faster in pursuit of lower interest rates, but will never catch the carrot, because fewer and fewer people will want to buy bonds and more and more people will be selling these increasingly worthless bits of paper…… bits of paper whose value cannot accurately be determined because governments increasingly obscure the measures of inflation.
No. of Recommendations: 1
Keeping rates near zero will be an expensive proposition.
Yes, but there are other income sources, or rather income savings: if the inflation rate can be set to near 0 for 2025, the COLA for social security can also be set to close to 0. That's a few bucks saved, although seniors and others on social security may feel a bit of a pinch here and there. The rate is being set for the 3rd quarter now so it will be interesting to see what the SSA comes up with...
Pete
No. of Recommendations: 1
But the hamster on the hamster wheel will have to run faster and faster in pursuit of lower interest rates, but will never catch the carrot, because fewer and fewer people will want to buy bonds and more and more people will be selling these increasingly worthless bits of paper…… bits of paper whose value cannot accurately be determined because governments increasingly obscure the measures of inflation.
Trump is too stupid to understand this. And his economic advisors only care about keeping their jobs which means never telling Donny NO.
