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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%

#171

Post by ForHackernews »

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.

Poor people are debtors: Inflation is a huge positive for them! If I owe $10,000 of credit card debt at a nominal 25% APR, I am praying for that hyperinflation to kick in soon.

Re: US Series I Savings Bonds Now Yielding 7.12%

#172

Post by mc32 »

ForHackernews wrote: post #171
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.

Poor people are debtors: Inflation is a huge positive for them! If I owe $10,000 of credit card debt at a nominal 25% APR, I am praying for that hyperinflation to kick in soon.

The cost of borrowing goes up with inflation.

It’s like has prices. They go up before the new delivery is in the grind tanks, but goes back down way after the expensive gas in the ground was all sold.

Re: US Series I Savings Bonds Now Yielding 7.12%

#174

Post by webinvest »

7.12% for Treasury bonds is great but you can get 17-21% with USDC stable coins (crypto).

On Kucoin you can make money by lending out stablecoins to margin traders. Here are some of the current rates:

Lend USDC for 7+ days: 17.52%

Lend USDC for 14+ days: 20.44%

Lend USDC for 28+ days: 20.80%

Margin lending is safer than most other forms of lending because margin loans are fully collateralized and if the borrower gets a margin call, their assets are auto-liquidated to pay you back. In the rare event that the system couldn’t get back all of the collateral, the difference is paid out from an insurance fund that about 10% of interest is paid into.

Benefits: 1) interest is paid out daily and can be (automatically) reinvested. 2) your investment can be pulled out in 7-28 days or less if the borrower pays you back earlier. 3) there is no interest forfeit penalty that these bonds have.

Drawbacks: I don’t think there is any 7% yielding asset in the world that is as safe as a US government bond.

Disclosure: I don’t do this myself, hold many bonds, or keep much cash. This is a financial suggestion but it is not a financial recommendation. Do your own research.

Re: US Series I Savings Bonds Now Yielding 7.12%

#175

Post by medvezhenok »

newacct583 wrote: post #64
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?

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…

Note that how we calculate inflation has actually changed since the Carter Years - most importantly the substitution of housing in the inflation basket with OER (owner-equivalent rent).

If we had the previous inflation measure (same as 1970s), CPI would be closer to double digits now (because of housing appreciation over the last year).

https://www.wsj.com/articles/inflation-numbers-1970s-cpi-hou...

Re: US Series I Savings Bonds Now Yielding 7.12%

#176

Post by beervirus »

fragsworth wrote: post #136
mhb wrote: post #97

Earlier quoted context omitted.

Is it more negative than the 0.1% that a savings account is paying?

No, but it's likely to return less than hoarding actual things/products.

Land, maybe. Hoarding toilet paper and beanie babies probably won’t get you great returns.

Re: US Series I Savings Bonds Now Yielding 7.12%

#177

Post by medvezhenok »

loeg wrote: post #110
NationalPark wrote: post #35

Earlier quoted context omitted.

People aren't reading the link and don't realize that it's 1. an I bond not a T bill and 2. Has a variable interest rate based on measured inflation that adjusts twice a year (the 7.12% in the title is the combined rate, so it can change during the term of the security).

In particular the fixed rate component is 0%. It will match inflation but not beat it.

It can beat inflation but only in a very certain/rare circumstance - inflation followed by deflation (since the nominal return on the bond can never drop below 0%).

Re: US Series I Savings Bonds Now Yielding 7.12%

#178

Post by webinvest »

webinvest wrote: post #174

7.12% for Treasury bonds is great but you can get 17-21% with USDC stable coins (crypto). On Kucoin you can make money by lending out stablecoins to margin traders. Here are some of the current rates: Lend USDC for 7+ days: 17.52% Lend USDC for 14+ days: 20.44% Lend USDC for 28+ days: 20.80% Margin lending is safer than most other forms of lending because margin loans are fully collateralized and if the borrower gets…

What’s with the downvotes? If you have a contradictory opinion, post it!

Re: US Series I Savings Bonds Now Yielding 7.12%

#179

Post by newacct583 »

medvezhenok wrote: post #175
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…

Note that how we calculate inflation has actually changed since the Carter Years - most importantly the substitution of housing in the inflation basket with OER (owner-equivalent rent). If we had the previous inflation measure (same as 1970s), CPI would be closer to double digits now (because of housing appreciation over the last year). https://www.wsj.com/articles/inflation-numbers-1970s-cpi-hou...

True enough, though if the modern real estate market had existed in the 70's then "inflation" would have been something closer to 30-40%.

Like it or not "home values" decoupled from "housing costs" over the past two decades. The reason for that metric change was to preserve equivalency, you don't get to argue backwards because of it.

Re: US Series I Savings Bonds Now Yielding 7.12%

#180

Post by ac29 »

webinvest wrote: post #178
webinvest wrote: post #174

7.12% for Treasury bonds is great but you can get 17-21% with USDC stable coins (crypto). On Kucoin you can make money by lending out stablecoins to margin traders. Here are some of the current rates: Lend USDC for 7+ days: 17.52% Lend USDC for 14+ days: 20.44% Lend USDC for 28+ days: 20.80% Margin lending is safer than most other forms of lending because margin loans are fully collateralized and if the borrower gets…

What’s with the downvotes? If you have a contradictory opinion, post it!

You're coming into a thread about ultra-safe treasury bonds to shill a risky, possibly illegal (in the US) crypto lending product. It doesn't add anything to the conversation - of course you can theoretically make more than 7% by taking on more risk.
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