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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%

#181

Post by newacct583 »

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

Not for five years they aren't! That chart ends in a few months. It's just reflecting CURRENT inflation rates. Again I ask, because everyone insists on cherry picking their way around this: Where is the source predicting a >7.12% inflation rate over the next five years? There is none. That's looney-tunes conspiracy nonsense.

Re: US Series I Savings Bonds Now Yielding 7.12%

#182

Post by newacct583 »

dnautics wrote: post #135
newacct583 wrote: post #123

Earlier quoted context omitted.

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.

> Those are transitory

Exactly. So is the pandemic. And so is the resulting inflation. I think you agree with me.

Re: US Series I Savings Bonds Now Yielding 7.12%

#183

Post by mdorazio »

anm89 wrote: post #165
sethammons wrote: post #91

Earlier quoted context omitted.

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.

The flip side is that they were buying these things when other interest rates were also correspondingly high due to inflation, so they got hosed in other ways (think mortgages).

Re: US Series I Savings Bonds Now Yielding 7.12%

#184

Post by webinvest »

ac29 wrote: post #180
webinvest wrote: post #178

Earlier quoted context omitted.

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.

Fair point. Maybe this comment should be deleted then.

Re: US Series I Savings Bonds Now Yielding 7.12%

#185

Post by dnautics »

newacct583 wrote: post #182
dnautics wrote: post #135

Earlier quoted context omitted.

> 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.

> Those are transitory Exactly. So is the pandemic. And so is the resulting inflation. I think you agree with me.

Good luck with your wishful thinking. The pandemic will end, inflation will not.

Re: US Series I Savings Bonds Now Yielding 7.12%

#186

Post by mikewarot »

bityard wrote: post #156
mikewarot wrote: post #59

Earlier quoted context omitted.

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?

No "economic" indicators such as government statistics per se.

The supply chain looks ready to collapse, along with public confidence in all of our institutions. History doesn't repeat, but it sure is rhyming, quite loudly right now.

There are many many months of rent and utility bills that haven't been paid. Due to the massive shift to remote work, commercial office space is likely to experience a 50% or more occupancy drop (maybe even worse?). Our large urban centers have a funding model that is suddenly unsustainable if this happens.

Everything to me, at least, is screaming danger, danger Will Robinson.

Re: US Series I Savings Bonds Now Yielding 7.12%

#187

Post by skinnymuch »

jacquesm wrote: post #129
skinnymuch wrote: post #45

The fixed rate is 0% as has been the case. The inflation yield rate has been bouncy. This doesn’t seem as good as the title and comments are making it seem unless things stay this way. Table near bottom of page shows the inflation rate over time. Edit: I agree this could be a sign of something long term Edit: recent history of rates -- Inflation rates -- Nov 2021 3.56% May 2021 1.77% Nov 2020 0.84% May 2020 0.53% Nov…

There is nothing in that formula that stops it from going below zero. You are making assumptions about the inputs.

Cool having you respond to a comment of mine!

Yeah as the sibling commented. It is written in the link from the link where they bring up the formula.

Re: US Series I Savings Bonds Now Yielding 7.12%

#188

Post by nytesky »

mikewarot wrote: post #186
bityard wrote: post #156

Earlier quoted context omitted.

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

No "economic" indicators such as government statistics per se. The supply chain looks ready to collapse, along with public confidence in all of our institutions. History doesn't repeat, but it sure is rhyming, quite loudly right now. There are many many months of rent and utility bills that haven't been paid. Due to the massive shift to remote work, commercial office space is likely to experience a 50% or more occupa…

Great Depression as ALL about deflation, we see inflation right now. Which will be painful, but since all countries are seeing inflation its likely just driven by costs in production.

If we huge inflation, then all these expensive mortgages people stretched for the last few years will be super cheap, so all of a sudden majority of Americans will be out of debt, for example.

All those empty commercial properties instead of foreclosing will simply rent home out for "low rent" purposes like gyms, but that low rent in inflated terms will cover the cost of their lease/mortgage.

It could be messy, and will need support from many players, but I don't think we are looking at a Greater Depression.

Re: US Series I Savings Bonds Now Yielding 7.12%

#189

Post by mhb »

watchdogtimer wrote: post #52
rajup wrote: post #8

Earlier quoted context omitted.

But the rate is only for 6 months and limited to $10000 per SSN per year, which does not make it terribly useful.

FWIW, you can get purchase[0] up to an additional $5000 a year in paper format if you overpay your Federal income taxes and request the refund be paid as a paper I-bond. [0] - https://www.treasurydirect.gov/indiv/research/faq/faq_irstax...

It also seems like you can pay an extra $5K in estimated tax in December, use the refund of it to buy a series I bond and then convert that to an electronic bond.

Re: US Series I Savings Bonds Now Yielding 7.12%

#190

Post by vineyardmike »

bityard wrote: post #157
rdtwo wrote: post #131

Earlier quoted context omitted.

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.

> do worse in aggregate than an index fund.

This is widely stated, but only barely accurate sentiment.

First, index funds do good at 1 thing - which is provide "market returns". Market returns is basically defined by an index, so naturally the definition is circular. The parent mentioned dividends, which are not the normal target for investors (but useful for retirees and others who want an "income" from investment). Dividend stocks may do worse at beating market returns, but better at income generation.

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