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To: Les H who wrote (8574)	9/9/2003 4:08:25 PM
From: Tommaso	Respond to of 29596

The only problem with the TIPS is that the government is managing the CPI figures so that real inflation is not being recognized. Therefore the inflation-protection feature of TIPS has been exaggerated. At the same time, TIPS are vulnerable, like all other long term bonds, to interest rate rises. So in the event of rising inflation and rising interest rates, they would not be as good as six-month treasury bills and could actually lose money for a while. But they do offer a shot at preserving a pretty good fraction (if not 100%) of real wealth. Losing 20% when everyone else is losing 75% is not bad.