By The Way

In unrelated news Social Security benefits will not increase next year due to the fact that the CPI is not showing inflation and holders of TIPS will receive next to bubkus but their purchasing power is is uneffected as long as they stay away from anything in the CRB.

1 comment:

PJ said...

I don't understand why anyone would invest in TIPS. The inflation index is entirely under the control of the party who owes you the money. So you have a bond where the debtor gets to decide how much he pays you.

This might not matter if government debt was low and reputation was more important than money, but as debt levels approach unpayable levels, reputation will be shot anyway.

There are other inflation hedges that are, to my mind, less risky.