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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%

#151

Post by SavantIdiot »

waynecochran wrote: post #92
SavantIdiot wrote: post #14

Earlier quoted context omitted.

7% on a bond is very good. 7.2% doubles every 10 years. For those of us getting older with lots of stock assets, we (conservative investors) want to transition to something safe so that smash-and-grab market fluctuation don't make us lose our money in retirement. Tiered bonds are something safe to do when you hit your mid 50's once the "thrill" of investing in what are today called "meme" stocks ("penny stocks" in th…

Using A = P(1 + rt) and setting A = 2P and t = 10 gives r = 1/10 or 10% -- where is my math wrong?

It's exponential growth.

(1.072)*(1.072)*(1.072)*(1.072)*(1.072)*(1.072)*(1.072)*(1.072)*(1.072)*(1.072) = ~2.00

Re: US Series I Savings Bonds Now Yielding 7.12%

#152

Post by mc32 »

dragonwriter wrote: post #150
mc32 wrote: post #144

Earlier quoted context omitted.

The government basket used to calculate inflation isn’t the same basket of goods pensioners buy from. If inflation were “good” then the US along with many countries the word over would cause it to happen —it’s easy to do.

> if inflation were “good” then the US along with many countries the word over would cause it to happen Literally every single one of them that controls its own monetary policy (including the US) actively and deliberately does, so there's that.

My implication was extraordinary inflation isn’t good. The fed, since Bush/Clinton/Greenspan targeted 2-3.5% as desirable “good”.

What I mean is if what we have now (which is about double the norm) were good, we would have done it a long time ago and so would have others.

Re: US Series I Savings Bonds Now Yielding 7.12%

#153

Post by ksaun »

mc32 wrote: post #69
pjc50 wrote: post #54

Earlier quoted context omitted.

When the real shock of COVID disruption abates. Which is .. not looking great at the moment.

Even Bill Maher is saying we're pretty much at a plateau and should act like it instead of stretching this further for whatever reasons.

Why do you say "even" here?

Bill Maher has expressed frustration with lockdowns throughout the pandemic. That he holds the view you mention does not seem surprising or remarkable to me.

(He also seems like an unusual choice to bring in as an authority on this topic. He is primarily a comedian.)

Re: US Series I Savings Bonds Now Yielding 7.12%

#154

Post by bko »

pjc50 wrote: post #54
mc32 wrote: post #41

Earlier quoted context omitted.

Right. The real question is : when will it abate? Is it transitory as they unflinchingly claimed or are we in the Carter Years?

When the real shock of COVID disruption abates. Which is .. not looking great at the moment.

Whats going to happen to the $12 trillion of new money created during covid?

Re: US Series I Savings Bonds Now Yielding 7.12%

#155

Post by 999900000999 »

sacred_numbers wrote: post #85
999900000999 wrote: post #68

Any real risk in dumping 10k in these and forgetting about it for a decade. Have these ever lost money ? 7% yield is outrageously good assuming you can't lose money. Then again US currency might be worthless if they default on these.

The only risk is losing out on greater gains from investing in a higher yield asset. Keep in mind that the yield on these will probably drop in 6 months, since the dividend is adjusted semiannually. If inflation keeps going the dividend will stay high, but other assets will also appreciate due to inflation.

Currently I'm maxing out my 401k, this seems like a good plan once I hit the 20k annual max.

Re: US Series I Savings Bonds Now Yielding 7.12%

#156

Post by bityard »

mikewarot wrote: post #59
mc32 wrote: post #41

Earlier quoted context omitted.

Right. The real question is : when will it abate? Is it transitory as they unflinchingly claimed or are we in the Carter Years?

They called it the Great War, then it was renamed to World War I They called it the Great Depression, I suspect it's about to get renamed. This is going to suck.

What are the economic indicators showing we're about to have another depression?

Re: US Series I Savings Bonds Now Yielding 7.12%

#157

Post by bityard »

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

Key word there, might. Even people who's actual job it is to pick winners and losers do worse in aggregate than an index fund.

Re: US Series I Savings Bonds Now Yielding 7.12%

#158

Post by latchkey »

jacquesm wrote: post #127
latchkey wrote: post #12

I have an Ally bank account. Over the past couple years, they've been great about religiously informing me of my interest rates dropping to almost zero. I see something like this and just have to laugh. When will I get my increase notification?

Lucky you, mine are < 0. (-.5 % to be precise). That doesn't stop the government here from calculating your taxes based on an imaginary 4.5% gain.

This is exactly why all the hate HN has for the crypto world makes me shake my head. There are people actively working on developing alternatives (DeFi) that while today are not perfect, from a technological perspective generally have the right motivation and direction.

There is absolutely no reason that people should be storing their money in a place that gets to use it however they want and charge you for that too. Never mind the endless printing and excessive taxation. Bankers aren't driving Kia's, but everyone else is.

Re: US Series I Savings Bonds Now Yielding 7.12%

#159

Post by kpommerenke »

waynecochran wrote: post #92
SavantIdiot wrote: post #14

Earlier quoted context omitted.

7% on a bond is very good. 7.2% doubles every 10 years. For those of us getting older with lots of stock assets, we (conservative investors) want to transition to something safe so that smash-and-grab market fluctuation don't make us lose our money in retirement. Tiered bonds are something safe to do when you hit your mid 50's once the "thrill" of investing in what are today called "meme" stocks ("penny stocks" in th…

Using A = P(1 + rt) and setting A = 2P and t = 10 gives r = 1/10 or 10% -- where is my math wrong?

It should be A = P(1 + r)^t because of compounding.

Re: US Series I Savings Bonds Now Yielding 7.12%

#160

Post by AnimalMuppet »

mikewarot wrote: post #59
mc32 wrote: post #41

Earlier quoted context omitted.

Right. The real question is : when will it abate? Is it transitory as they unflinchingly claimed or are we in the Carter Years?

They called it the Great War, then it was renamed to World War I They called it the Great Depression, I suspect it's about to get renamed. This is going to suck.

You're using (rising) inflation as an indicator that we're headed for a depression? That's a rather unconventional use of economic indicators...
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