Why are TIPS bonds only paying about 2⅓% when inflation is at 7.9%?

Discussion in 'Fixed Income' started by kmiklas, Apr 11, 2022.

  1. xandman

    xandman

    TIPS charge you a negative real rate.

    Why would they pay you a positive real rate in TIPS when world govt bond rates have a negative real rate of return? Negative real rates has been THE topic for decades. You'll be swimming in research papers without a conclusive answer.

    Conversely, PE's have shot up asymptotically and have no meaning.
     
    Last edited: Apr 11, 2022
    #11     Apr 11, 2022
    kmiklas likes this.
  2. SunTrader

    SunTrader

    Other than the 1970's I like to know when else in history did Gold climb dramatically higher during an inflationary period?

    2001-2011 wasn't sky inflation but Gold certainly was in a bull trend

    2015-2020 same
     
    #12     Apr 11, 2022
  3. kmiklas

    kmiklas

    My understanding is that AU is the traditional hedge against inflation.

    Stack those coins in the safe, peeps!
     
    #13     Apr 11, 2022
  4. TheDawn

    TheDawn

    Because they don't want to pay more??
     
    #14     Apr 11, 2022
    murray t turtle likes this.
  5. SunTrader

    SunTrader

    "Old wives tale".

    But no harm stacking em just like stacking bottles of fine wine, exotic cars, priceless art, and umm baseball cards.

    Maybe they keep ahead of inflation. Maybe they just hang with inflation.

    Gold has a funny habit of going up fast .... and going down fast.

    How to get the timing down is the trick.
     
    #15     Apr 11, 2022
    murray t turtle and kmiklas like this.
  6. Ibonds should have an 8 handle when the new reset rate is announced next month.
     
    #16     Apr 12, 2022
  7. Yes, when you remove owner equivalent rent. I think most folks realize the Federal Government is rigging the numbers. My guess is 18% when calculated from the 1980's standard.
     
    #17     Apr 12, 2022
  8. nitrene

    nitrene

    Gold is not a direct hedge against inflation. It is a hedge against the stability of Governments. Gold was gaining in the 1930s which is one of the reasons FDR confiscated them (along with devaluing the currency during the sovereign debt crisis after the collapse of the Rothschild superbank Creditanstalt).
     
    #18     Apr 17, 2022
  9. tiddlywinks

    tiddlywinks

  10. Millionaire

    Millionaire

    These are shadow stat charts, what they do is use the same method the government used to use in the past.

    It was 17% in March 2022 using the government's 1980 method.
    And 12% if you use the government's 1990 method

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    Last edited: Apr 27, 2022
    #20     Apr 27, 2022