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To: Follies who wrote (37775)	1/21/2000 4:27:00 PM
From: Haim R. Branisteanu	Respond to of 99985

Dale you hit the nail on the head. Those bonds pay 3% or 3.3% above the reported inflation but still they trade around 4.3% or 1% higher which means that the BSL (which bosses are politically nominated) is misreporting the inflation numbers by 1% In other words the BLS publishes fake reports who under-estimates inflation by a mere 30%. --- and OH GEE I just forgot - the markets have it all wrong they do not understand inflation adjusted bonds <GG> BWDIK Haim

To: Follies who wrote (37775)	1/21/2000 4:40:00 PM
From: Jacob Snyder	Respond to of 99985

re: Aren't the "totally riskless inflation-indexed..." based on the good faith of the US gov. in reporting the CPI accurately? Yes, they are. And, yes, the government has repeatedly adjusted how it calculates the CPI. However, if enough people buy those inflation-indexed bonds, then it will have a powerful constituency, just like Social Security or the tax deduction on mortgage interest. The government won't be able to cheat (by manipulating the CPI data), because a powerful interest group will be watching them carefully and continuously. Nothing is 100%. But inflation-indexed long term bonds backed by the US government (i.e., taxpayers) are darn close. The gold standard, I might say, if I wanted to be ironic.

To: Follies who wrote (37775)	1/21/2000 5:39:00 PM
From: Crimson Ghost	Respond to of 99985

Dale: You hit the nail on the head. Many feel the reported CPI numbers significantly understate inflation. CPI definitions were changed several years ago under heavy pressure from Wall Street to minimize reported inflation. These changes also have significantly reduced social security cost of living adjustments. I estimate the the cost of living for senior citizens who spend more money on drugs than computers and the internet is climbing twice as fast as reported CPI inflation. Of course that adds to the pressure on 75 year olds falling farther and farther behind to gamble their modest nest eggs on internet stocks.