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Strategies & Market Trends : World Outlook -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (2479)	9/13/2003 11:06:52 AM
From: Les H	Respond to of 49754

Japan to issue inflation-indexed bonds japantimes.co.jp Under the plan, the 10-year JGBs will carry a fixed coupon, but the principal would fluctuate depending on changes in the consumer price index. A rise in prices would mean a boost in the principal as well as a corresponding increase in interest payments. Sounds like a pretty raw deal. You get interest of about 1-2 percent while your principal falls in value. You pay short-term income tax rates on the interest and receive a long-term capital gains tax loss on your principal. If the cpi rises too much, the government can always incorporate new metrics to suppress the value.