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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: J. M. Blackburn who wrote (14774)	6/25/2000 7:26:00 AM
From: Archie Meeties	Read Replies (1) \| Respond to of 15132

Last week Bob mentioned I-Bonds Unfortunately, i-bonds use the cpi to gauge inflation. If they used unbiased data to calculate their rate, I would be more interested. As we recently saw, the government has every reason to keep the cpi's low, for political and financial (cost of living adjustments) reasons. If statistics were fudged in this period of relatively benign inflation, I'd rather not be stuck with this supposedly "inflation hedged" investment during real inflation. Besides, I'd feel like I was fueling the inflationary fire by asking the government to print money at speeds slightly in excess of inflation. -g- The only possible escape from this paradox is if the inflation bond could draw enough foreign investment to inflate the dollar, driving down inflation via currency strength. In a sense, this is the purpose of the i-bond - a vehicle by which central banks can support their currency during inflationary times. In any case, I think that i-bondss are second rate investments if your goal is to have an inflation hedge.