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To: Oblomov who wrote (62446)	1/28/2001 8:50:57 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

The only way the nominal rate can get to 4% with a real rate of 4% is for the credit bubble to unwind, destroying capital. This implies that deflation, not inflation rules the day. Brother can you spare a dime? Where is the nearest breadline? So those inflation indexed treasuries would likely yield 3.2-3.5 in such a case. I don't know them well enough to know if there is a clause for negative inflation adjustments <g> We haven't seen such a situation in quite some time, more than a generation. Mostly we assume we will inflate our way out, which alleviates the debt burden by making money cheaper and kills the savers. I hope this does not occur, because I count myself among the savers.