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US Series I Savings Bonds Now Yielding 7.12%

treasurydirect.gov

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Re: US Series I Savings Bonds Now Yielding 7.12%

#131

Post by rdtwo »

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.

Only if you own paper debt assets like bonds. If you own dividend paying stock or property you are going to be fine. If you buy stock in a company with a heavy debt load that is slowly digging it’s way it (not sure they exist) you might come out a big winner

Re: US Series I Savings Bonds Now Yielding 7.12%

#132

Post by dangle1 »

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?

This is a pretty limited tool, but in the last year it's caught the attention of people dismayed by low CD and savings account rates.

In that context, the argument is that this can be a good place to keep an emergency fund, provided one has enough emergency cash in other places to bridge the first year before the I Bond can be first redeemed. The withdrawal penalty between years 1-5 is 3 months of interest, so not terrible if being withdrawn in an emergency.

No one's getting rich off this instrument, but it could be a good low hanging fruit option for some.

Re: US Series I Savings Bonds Now Yielding 7.12%

#133

Post by dnautics »

mc32 wrote: post #98
Spooky23 wrote: post #84

Earlier quoted context omitted.

Exactly. As a well to do tech person, the impact of 10% inflation is nil when my retirement funds returned 25%. Now if I was some über rich dude with millions of capital tied up high friction investments, forced to choose between paying capital gains taxes or losing to inflation, i may feel differently. Frankly, we need to put shitty businesses that exist by virtue of low interest rates out of business. It should not…

It's the poor who this hits most. Most tech workers can 'absorb' this. We may get raises, bonuses, etc., to make up the diff. But your average Joe and Jill in the world working restaurants or deliveries, they can't just shrug it off.

Joe and Jill? What about your unemployed person, formerly-middle-income retiree on fixed salary, homeless person surviving by panhandling, nonprofit serving the poor/homeless...

Inflation is nothing but fucking over the people who can handle it the least.

Re: US Series I Savings Bonds Now Yielding 7.12%

#134

Post by aeternum »

newacct583 wrote: post #116
anm89 wrote: post #87

Earlier quoted context omitted.

Telling that your comment is starting to gray out but I have a degree in economics and I don't listen to talk radio Housing inflation has averaged 14% to start. https://www.reuters.com/world/us/runaway-us-home-price-rises...

Great, then surely you can cite me the source you used to predict that general inflation (not, ahem, some cherry picked real estate numbers) would be higher than 7% over the life of this bond, producing the negative interest you were teasing?

NY Fed is predicting near/over 7% in many categories: https://www.newyorkfed.org/microeconomics/sce#/commodexp-1

Re: US Series I Savings Bonds Now Yielding 7.12%

#135

Post by dnautics »

newacct583 wrote: post #123
mc32 wrote: post #98

Earlier quoted context omitted.

It's the poor who this hits most. Most tech workers can 'absorb' this. We may get raises, bonuses, etc., to make up the diff. But your average Joe and Jill in the world working restaurants or deliveries, they can't just shrug it off.

That's almost exactly backwards, where are you getting this? The big inflation driver right now is (1) the increase in liquid cash in the economy due to covid relief programs and (2) the higher wage levels needed to get people to work during a pandemic. The "poor" are, in fact, doing significantly better (economically, anyway) now than they were in 2019. I'll have to go look it up, but there was a great blog post a f…

> The relief bills helped a ton.

Those are transitory, and even if they become permanent, never forget, inflation is a compounding process, so to keep up there must be the political will to re-up them. Moreover, the irony is that the way to fund the relief bills is to create more inflation.

You are advocating putting all of society on an accelerating treadmill that pushes people backwards towards poverty.

Re: US Series I Savings Bonds Now Yielding 7.12%

#137

Post by ethbr0 »

rdtwo wrote: post #131
rsync wrote: post #105

Earlier quoted context omitted.

"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.

Only if you own paper debt assets like bonds. If you own dividend paying stock or property you are going to be fine. If you buy stock in a company with a heavy debt load that is slowly digging it’s way it (not sure they exist) you might come out a big winner

> company with a heavy debt load that is slowly digging [its] way [out?]

Telecom? Utilities? Mining?

Re: US Series I Savings Bonds Now Yielding 7.12%

#138

Post by seniorThrowaway »

loeg wrote: post #115
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…

E bonds are guaranteed to double in value at 20 years, for a nominal (not inflation adjusted) ~3.5% return. They yield almost nothing before the 20 year term.

Thanks. They were a decent deal back in the low CPI days.

Re: US Series I Savings Bonds Now Yielding 7.12%

#139

Post by miketery »

So I registered for an account just now. Most interesting part was when I had to login. You have to use a Web UI keyboard (i.e. buttons arranged in a keyboard), to key in the password. I use a pw manager, so that would be annoying.

Ended up doing inspect element, and deleting the readonly attribute. That worked. Super weird.

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