Treasury Inflation-Protected Securities (TIPS)

desultorypawn · Tar Sands Joined: Jun 04, 2008 Posts: 41

A good buy?

I'm completely unsure of how the CPI reflects inflation and how much the TIPS actually keep up with inflation.

Does anyone know much about TIPS?

Cashmere · Light Sweet Crude Joined: Mar 27, 2008 Posts: 1971

DP -

CPI not even close to inflation.

Taxes on TIPS is a total and utter scam - you need to pay tax on unrealized gains.

Nuff said.

TIPS are for suckers.

If they actually protected you from inflation and they didn't tax you on unrealized gains, they wouldn't be able to print enough of them.
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Massive Human Dieoff must occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where you live. If you fail to recognize this, then your odds of living move toward the "going to die" group.

heroineworshipper

Read the annual change in import price index to get a better idea of inflation. People hoard things they expect to need in the future. Accumulating any kind of money is something individuals can't do.
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People first, then things, then dollars.
There will be enslavement, cannibalism, & zombie invasions.

desultorypawn · Tar Sands Joined: Jun 04, 2008 Posts: 41

Thanks for the info, they do seem good enough to not be true.

AlterEgo

Google the Shadowstats website, and look at the real inflation rates, then compare to the TIPS rate. Or better yet, figure out what your personal inflation rate is. It's a fleecing if you buy and hold TIPS.
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Because it's all about the oil.

mattduke · Light Sweet Crude Joined: Oct 28, 2005 Posts: 1362

Run, do not walk, away from TIPS and IBONDS. They are a cruel joke played by the perpetrators of inflation on their victims. Besides, where does government get the money to pay back any of their bonds? They either tax you for it, or they inflate. Either way, you lose.

Medeno · Coal Joined: Jun 19, 2008 Posts: 2

From the Pimco Website, Bond King Bill Gross says,

"What are the investment ramifications? With global headline inflation now at 7% there is a need for new global investment solutions, a role that PIMCO is more than willing (and able) to provide. In this role we would suggest: 1) Treasury bonds are obviously not to be favored because of their negative (unreal) real yields. 2) U.S. TIPS, while affording headline CPI protection, risk the delusion of an artificially low inflation number as well. 3) On the other hand, commodity-based assets as well as foreign equities whose P/Es are better grounded with local CPI and nominal bond yield comparisons should be excellent candidates. 4) These assets should in turn be denominated in currencies that demonstrate authentic real growth and inflation rates, that while high, at least are credible. 5) Developing, BRIC-like economies are obvious choices for investment dollars."

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+June+2008.htm

TommyJefferson