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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%

#161

Post by op00to »

ksaun wrote: post #153
mc32 wrote: post #69

Earlier quoted context omitted.

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.)

Even Donald Trump said end the lockdowns!!!

Re: US Series I Savings Bonds Now Yielding 7.12%

#162

Post by AnimalMuppet »

dragonwriter wrote: post #142
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.

> But the biggest losers overall are those with fixed incomes dealing with rapidly rising prices. So, non-SS pensioners? Not: Social Security recipients (it has an inflation-indexed COLA). Not: public benefit recipients (this inflation is in part a product of temporary increases to aid at the lower end of the economic spectrum). Not: low-end labor, where prices are being bid up. (And also, often a beneficiary of the…

Even those with COLAs. See, prices go up, and then, later, the COLA adjustment kicks in. It still hurts those who get COLA adjustments, just not as bad as it hurts those who don't.

Re: US Series I Savings Bonds Now Yielding 7.12%

#163

Post by Spooky23 »

mc32 wrote: post #81
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…

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…

Huh? We just ended a 20-year war and are stuck in a military investment cycle to replace the worn out and obsolete equipment.

Re: US Series I Savings Bonds Now Yielding 7.12%

#164

Post by anm89 »

bduerst wrote: post #141
anm89 wrote: post #79

Earlier quoted context omitted.

CPI is 5% not inflation. If you believe the average American's monthly expenses are only up 5% this year I've got some bridges to sell you

What do you think the inflation rate is then? It's only been over 5% since July, not YTD: https://ycharts.com/indicators/us_inflation_rate

There is no "one true inflation" but there are certainly better ways to look at it than CPI. For one get rid of all the hedonic adjustment nonsense, stop moving the goal posts by changing basket composition, and focus on small group of food, housing, and transportation. If you do that you are going to get a hell of a lot higher than 5%

Re: US Series I Savings Bonds Now Yielding 7.12%

#165

Post by anm89 »

sethammons wrote: post #91
joelbluminator wrote: post #55

Earlier quoted context omitted.

Might do better than the market in 5-10 years though...

back when I worked as an investment advisor, I met a lady who had a 30 year $250k CD with a fixed 15% (maybe higher). That was a solid investment!

Yeah that is one of the cases where the older generation really did have it way easier. Imagine having access to 15% CDs. I know 20% was out there too.

Re: US Series I Savings Bonds Now Yielding 7.12%

#166

Post by anm89 »

aeternum wrote: post #134
newacct583 wrote: post #116

Earlier quoted context omitted.

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

Right, calling this some kind of talk radio conspiracy theory is completely ignorant. Go to the analysts at any major bank and see what they've got in their models. Or better yet, as you mentioned, go to the fed itself. And you KNOW, the fed is understating, not overstating those numbers.

Re: US Series I Savings Bonds Now Yielding 7.12%

#167

Post by Spooky23 »

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?

Nothing other than the fixed yield on savings bonds has been lousy for the last 15-20 years.

It’s backed by the full faith and credit of the US government and interest isn’t taxed until redemption, so it’s probably the safest/simplest investment for a retail saver that’s out there.

Re: US Series I Savings Bonds Now Yielding 7.12%

#168

Post by Spooky23 »

Raidion wrote: post #42
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?

I'm not an expert either, but the two differences that come to mind are: CDs are FDIC insured, bonds aren't. This doesn't make a big difference when we're talking government bonds, but you can lose your shirt on a regular corporate/muni bond. You'll always get CD money back (subject to 250k FDIC limit) Bonds also are also an asset that fluctuates in price: A bond can be sold at a price different from it's face value.…

No, those arguments are not a factor.

FDIC insurance is backed by the US Government. US Saving Bonds are backed by… the US government. They can be redeemed at any time, subject to certain constraints. They are not tradable bonds — a TIPS bond would be the US government instrument that is tradable and inflation protected.

Re: US Series I Savings Bonds Now Yielding 7.12%

#169

Post by Spooky23 »

anm89 wrote: post #164
bduerst wrote: post #141

Earlier quoted context omitted.

What do you think the inflation rate is then? It's only been over 5% since July, not YTD: https://ycharts.com/indicators/us_inflation_rate

There is no "one true inflation" but there are certainly better ways to look at it than CPI. For one get rid of all the hedonic adjustment nonsense, stop moving the goal posts by changing basket composition, and focus on small group of food, housing, and transportation. If you do that you are going to get a hell of a lot higher than 5%

There’s no one answer or methodology that answers all needs. CPI isn’t perfect but does capture a consistent and balanced view of inflation.

I know for my family, the only significant inflation factor is food. I have a short commute and fixed mortgage. For my family members who live in the exurbs, fuel costs are very impactful.

Rural inflation isn’t captured well because rural areas have been depopulating.

Re: US Series I Savings Bonds Now Yielding 7.12%

#170

Post by ForHackernews »

bko wrote: post #154
pjc50 wrote: post #54

Earlier quoted context omitted.

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?

It'll just go into house prices and $TSLA, same as all the other funny-money.
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