US Series I Savings Bonds Now Yielding 7.12%

Post by [deleted] » Mon, Nov 01, 2021, 3:31 PM UTC

jonathankoren wrote: post #102

mc32 wrote: post #81

Earlier quoted context omitted.

I don't think the financial system of the 70s is the same financial system of the 2000s. We were were also pouring a lot of resources into countering the 'second world' including the Vietnam war, missile defence, etc. add to that the 'oil shock.' As far as I can recall, the current system is 'calibrated' for 2-3% annual growth. 5-8% is entering the banana republic inflation zone. You, know, where they'd have to 'deva…

> As far as I can recall, the current system is 'calibrated' for 2-3% annual growth. 5-8% is entering the banana republic inflation zone. This is simply untrue. Like not even close the definition of hyperinflation used by economists. Hyperinflation is a monthly inflation rate of 50%, or 12974.63% annually. This is scare tactics.

Post by mc32 » Mon, Nov 01, 2021, 3:31 PM UTC

jonathankoren wrote: post #102

mc32 wrote: post #81

Earlier quoted context omitted.

I don't think the financial system of the 70s is the same financial system of the 2000s. We were were also pouring a lot of resources into countering the 'second world' including the Vietnam war, missile defence, etc. add to that the 'oil shock.' As far as I can recall, the current system is 'calibrated' for 2-3% annual growth. 5-8% is entering the banana republic inflation zone. You, know, where they'd have to 'deva…

> As far as I can recall, the current system is 'calibrated' for 2-3% annual growth. 5-8% is entering the banana republic inflation zone. This is simply untrue. Like not even close the definition of hyperinflation used by economists. Hyperinflation is a monthly inflation rate of 50%, or 12974.63% annually. This is scare tactics.

Post by loeg » Mon, Nov 01, 2021, 3:35 PM UTC

seniorThrowaway wrote: post #104

I bought one in the early 2000's, should be getting about 10% on it. The trouble with these is that the fixed rate has been 0% for some time now. If inflation does go down you could end up with a very low yielding bond. I forget what exactly it equates to on a yearly interest basis but series E bonds don't really pay squat until they hit the 20 year mark, at which time they are guaranteed to double. I wish when I was…

Post by loeg » Mon, Nov 01, 2021, 3:35 PM UTC

codegeek wrote: post #30

tombert wrote: post #3

I'm kind of an idiot with anything terribly elaborate in the financial world, so forgive a bit of a dumb question: what are the downsides to bonds instead of using something like a CD?

Bonds are not guaranteed like CDs. Bonds can fail. You could lose your investment. Even though they are a lot more safer than stocks, but they are still a risky investment compared to CDs.

Post by newacct583 » Mon, Nov 01, 2021, 3:36 PM UTC

rsync wrote: post #105

newacct583 wrote: post #64

Earlier quoted context omitted.

We would not be "in the Cater [sic] Years" regardless. The lowest inflation reported in the late 70's was about 5%, with a peak at 15%. Last year's post-covid number was 5.4%. Your point seems mostly like demagoguery. I think the more interesting question is... is 5% actually bad? There's a real argument to be had here that rapid inflation reflects genuine improvements like rising wage levels and that it's worth payi…

"Remember that the "biggest losers" in inflationary economies are people who hold assets, not investors ..." The biggest losers among sophisticated, moneyed actors are indeed people who hold assets. But the biggest losers overall are those with fixed incomes dealing with rapidly rising prices.