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2010-10-26 Home Front: Politix

US Inflation Bonds Are Sold With Negative Yield for First Time

Inflation-protected securities sold at negative yields for the first time ever on Monday as traders anticipate that the Federal Reserve will start a new round of asset purchases.

Analysts said that asset purchases by the Fed would lead to a higher inflation rate and a positive return on the bonds.
The market is saying the rate of inflation will be high.

Posted by Nimble Spemble 2010-10-26 00:00|| || Front Page|| [11132 views ] Top

#1 At least there are still buyers for US bonds. Heaven help us if some day there aren't enough buyers.

Posted by Anguper Hupomosing9418 2010-10-26 00:20|| 2010-10-26 00:20|| Front Page Top

#2 At least there are still buyers for US bonds. Heaven help us if some day there aren't enough buyers.

Last summer Treasury had been forcing Primary Dealers who are also US banks to buy their bonds.

Posted by badanov 2010-10-26 00:25|| http://www.freefirezone.org 2010-10-26 00:25|| Front Page Top

#3 COLA will kick in and eat the budget, but it'll be a year late [for calculation and implementation] for those on the edge. They just can't keep from doing something even if it is stupid. Price and wage controls next.

Posted by Procopius2k 2010-10-26 00:45|| 2010-10-26 00:45|| Front Page Top

#4 What sort of moron would buy these. Simply go to the bank and print out your money. Put it in a bag and stuff it under your mattress. That is 0 percent. Negative is less.

Posted by rammer 2010-10-26 00:49|| 2010-10-26 00:49|| Front Page Top

#5 ION TOPIX > CBS NEWS: CALIFORNIA UNEMPLOYMENT IS WORSE THAN DISASTROUS.

VERSUS

* BHARAT RAKSHAK > DEMOGRAPHIC TIME BOMBS: THE US IS BETTER OFF THAN THINK. US can not only hold on + survive agz curr Econ Crises, but may
be able to reap substantial Econ, Geopol benefits IFF IT CAN HOLD OFF FOR CIRCA 20 YEARS TIME [2030].

* SAME > THE US IS NOT VERY IMPORT-DEPENDENT, i.e. able to internally satisfy the vast majority of US domestic demand for Goods + Services + also International demands.

* SAME > US BANKING INDUSTRY IS A WELFARE STATE [operates as] WITHIN THE FREE-MARKET ECONOMY.

Posted by JosephMendiola 2010-10-26 01:10|| 2010-10-26 01:10|| Front Page Top

#6 PAKISTANI DEFENCE FORUM > OIC GDP VERSUS USA.

ARTIC > Collectively, OIC = Muslim Member- States = US$7.949TRILYUHN; while CHINA is approxi US$9.0TRILYUHN.

Posted by JosephMendiola 2010-10-26 02:16|| 2010-10-26 02:16|| Front Page Top

#7 Good thinking Rammer. I did just that a couple months ago. Didn't want to risk waiting till there's a run on the banks cause by then it's too late.

Posted by Scooter McGruder 2010-10-26 03:43|| 2010-10-26 03:43|| Front Page Top

#8 These are inflation bonds. The interest paid is equal to the rate of inflation plus the coupon rate. That means there is so much demand for inflation protection that people are willing to accept a little less than the rate of inflation just to get inflation insurance. Like the cram down sale badanov mentioned, this is another indication that we are running out of debt capacity.

Posted by Nimble Spemble 2010-10-26 03:56|| 2010-10-26 03:56|| Front Page Top

#9 A real menace is if yields are so poor on bonds that there is a flight to commodities. Overnight this turns inflation into hyperinflation, at the retail level, because you get the double whammy of price inflation at the same time as supplies are slashed.

For example, say ordinary inflation sends the price of gas up to $5/gal, and *then* the supply of gasoline is cut by 50%, because it is held by speculators who refuse to sell.

Posted by Anonymoose 2010-10-26 08:37|| 2010-10-26 08:37|| Front Page Top

#10 Yup. Commodities.

Posted by newc 2010-10-26 09:07|| 2010-10-26 09:07|| Front Page Top

#11 Actually I'm recommending Swiss Francs. The Euro is being pulled down by Greek/Spanish/etc economies. California will be haveing the same effect on the US economy next year. Japan has plateaued technologically and has unfortunate domestic social welfare expectations. The health of the yuan is tied to the strength of the US economy (see Cali above).

Of course the best option is to borrow to the hilt just before inflation kicks in, buy some of the depressed places on the market and pay the loan off in inflated $$$. That of course presumes you can get clear title - and it's looking like nothing that changed hands in the past 24 months is gonna pass muster easily on that count.

Posted by Pancho Angise6853 2010-10-26 14:34|| 2010-10-26 14:34|| Front Page Top

#12 Then maybe its time to get at the EPA and its proposed anti-agricultural measures.

Posted by swksvolFF 2010-10-26 14:53|| 2010-10-26 14:53|| Front Page Top

#13 Farm Land.

Posted by Bright Pebbles 2010-10-26 18:15|| 2010-10-26 18:15|| Front Page Top

#14 Southeast Kansas has super cheap farms for sale - and topology too! Just no work . . . local that is

Posted by Pancho Angise6853 2010-10-26 18:36|| 2010-10-26 18:36|| Front Page Top

#15 A flight to fish hooks and decent whiskey. Get out of cash and land now! Find me on KookList, 10 cents per acre anywhere. Ima help you, will also throw in a fishhook and a pint of Old Tennnyshoe.

Posted by Zombie Hillary Lover 2010-10-26 20:07|| 2010-10-26 20:07|| Front Page Top

#16 There is coal in Southeastern Kansas too if the EPA would let us burn it.

Posted by whitecollar redneck 2010-10-26 20:32|| 2010-10-26 20:32|| Front Page Top

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