Comments on: Accrued Interest: Time for Tips

By: Mike in Nola

Mike in Nola — Thu, 22 Jan 2009 13:03:29 +0000

I read this and a couple of similar articles a couple of nights ago while trying to decide where to park some IRA cash from maturing CD’s. My concern is the same as Thisson’s. There has been plenty of railing already in this blog about the unreliability of Federal statistics. The Federal government will have a great incentive to underreport CPI because of the savings on Social Security and TIPs. I imagine there are other programs, e.g. VA benefits? that would also provide the same incentives.

By: Bruce N Tennessee

Bruce N Tennessee — Wed, 21 Jan 2009 19:08:26 +0000

Yes, Econwatcher, I agree with your thinking…see this article about the Fed and the US dollar:

http://www.bloomberg.com/apps/news?pid=20601085&sid=a8iMJXwBG0N0&refer=europe

Hildebrand Says SNB Can Intervene in Franc Market

Well, wait just a second! I was confused. I was reading “dollar” where they had published “franc”….but you know, if you do that, it reads almost exactly like our own US policy…

…and these are the Swiss! …we are all sub-prime now…

By: DL

DL — Wed, 21 Jan 2009 19:07:02 +0000

If we do get a roaring bull market in commodities, which could happen next year, investors in TIPS will incur a significant “opportunity cost” by tying up their money in that way.

By: EconWatcher

EconWatcher — Wed, 21 Jan 2009 18:09:11 +0000

“But given the various stimulus plans currently in place and/or about to be enacted, long-term inflation remains inevitable.”

Not necessarily ‘inevitable’. The US is not the only country on the planet with a fiat currency, and all the major countries (Japan, EU, UK, China, Australia, Canada) are busy lowering interest rates toward zero and printing money in perfect Keynesian fashion. For the US to experience inevitable inflation means that all other countries mired in this mess need to reverse course and pursue an Austrian solution…not very likely.

By: Thisson

Thisson — Wed, 21 Jan 2009 17:49:07 +0000

And who is to say that CPI won’t be intentionally under-reported going forward?

By: wally

wally — Wed, 21 Jan 2009 14:11:54 +0000

“But regardless of whether its the right policy, printing money is a highly inexact tool. ”

And what is the evidence that the government actually knows how to print money? What they have done so far- which they thought was printing – seems to have not exactly worked. Could it be that money is something more than paper and impossible promises and that it cannot be so easily printed? Sure, they can print the markers, just like Vegas can manufacture chips… but that’s not the same thing as commerce, it appears.