Posted May 2, 2008 - 06:47 by Philip Brewer
Since 1998, the US Treasury has had a pretty good deal for small savers who were worried about inflation--the Series I Savings Bond. The interest it paid was based on inflation plus an additional return that was set by the Treasury and fixed for the life of the bond. On May 1st the Treasury announced the value of that fixed return for the next six months: Zero.
Posted April 23, 2008 - 04:30 by Philip Brewer
My very first experience running a household was in 1980, just as the last big inflation was spiking up over 10%. My carefully constructed budget was completely destroyed by prices that were rising by 1% every month. Since then, I've given considerable thought to how to deal with just that situation. Since history seems dangerously close to repeating itself, it's a timely topic.
Posted April 22, 2008 - 16:02 by Xin Lu
After the recent interest rate cuts by the Federal Reserve many of my bank and money market interest rates plummeted. Now the best yield I have is on my Series I Savings Bonds issued by the United States Treasury. These bonds are also known as I-Bonds and their yields fluctuate according to inflation. Currently, the yield is 4.28% and that beats all of my other cash investments. Here is some information on the interest rate on I-Bonds and the advantages of owning these bonds.
Posted January 20, 2008 - 07:16 by Philip Brewer
With prices up, price statistics that look preposterous to anyone who shops, and the Fed trying to thread the needle of preventing a recession without letting inflation run out of control, I want to make sure everyone knows that we're seeing at least two other issues besides inflation.
Posted January 18, 2008 - 00:10 by Philip Brewer
Of the various ills the economy can face, inflation is simultaneously the worst for society as a whole, and yet the easiest for individuals to deal with successfully. The strategies for dealing with inflation are pretty straightforward.
Posted November 15, 2007 - 12:38 by Philip Brewer
If you have a budget--more specifically, if you track your spending--you have the data you need to track changes in your own personal cost of living. That's a lot more useful than the Bureau of Labor Statistics CPI (although people on Social Security, or with a lot of money invested in inflation-indexed treasury bonds, care about the CPI too). It's not so easy to turn your data into a number, though. In fact, you'll face a lot of the same problems the government does.
Posted October 17, 2007 - 11:12 by Philip Brewer
The Consumer Price Index was released today, showing prices were up 0.3% last month and up 2.8% from a year ago. The same report also includes the so-called core rate, which excludes food and energy. Since food (up 4.5% from a year ago) and energy (up 5.3% from a year ago) are the principle contributors to increases in the cost of living, the core rate was naturally lower--up 0.2% (2.1% from a year ago). Except for making things sound better than they are, what's the benefit in talking about the core rate?
Posted September 2, 2007 - 03:32 by Philip Brewer
There are risks in any investment. The market might go down--or the market might go up, but your investment might go down anyway. The company that issued your stock or bond might go bankrupt. Even cash has the (virtually certain) risk that it'll be worth a bit less next month due to inflation. There are a couple of investments that eliminate almost all these risks: TIPS and I-Bonds.
Posted August 30, 2007 - 03:26 by Philip Brewer
There are those who point to the 1980 peak gold price of $850/oz and observe that the price would have to go up to $2149/oz just to get back to that point. I say, take a second look at the data.
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