The US govt issues large numbers of TIPS, whose value is adjusted by changes in the CPI. The CPI has some truly absurd "adjustments" which keep it artificially low. A great example was mentioned by praetorian2 on another thread, showing that the government is saying crude oil is DOWN 2% on the year, when in fact it has doubled. To me, given the large sums involved, this looks like criminal fraud on a grand scale. Bondholders are being fleeced out of billions by completely wrongheaded accounting. Given the severity with which Martha Stewart, Frank Quattrone, and Sam Waksal were punished, shouldn't we be indicting public officials and looking at serious jail terms here? At the very least, the inflation calculation for TIPS ought to be done by an independent non-governmental economic consultancy or accountancy firm, or perhaps better still an average should be taken of several different firms CPI estimates. For the government to be in charge of setting the CPI, which is then used to calculate how much money the government has to pay - well, to say that it is a conflict of interest is an understatement. If any private firm tried to get away with this, they would be crucified by the regulators, and the directors probably locked up for fraud.