The Death of Real Yields v.2

The new I-Bond rate was released today. The (real) rate dropped from 1.3% to 1.2% (it is set every six months). I once again ask, if we are so prosperous right now then how come we're not seeing it in the above chart?

Real yields seem to have peaked, again.

The Great Depression saw real yields go up as people hoarded dollars as prices fell. The 1970s saw real yields go down as people hoarded goods as prices rose.

It is really hard for me to be a deflationist these days, even with the housing market in such pain.

Just something to think about. Does this make the bet simple? Not even close. The 1970s had plenty of recessions. Further, the aftermath of the 1970s saw very high real yields (the 1980s). At some point there may actually be an aftermath, but I'd still expect a recession first. The 1970s ended with two of them, back to back.

For what it is worth, I'm of the opinion that real yields are dying, so I'm still a stagflationist.

See Also:
The Death of Real Yields

Source Data:
FRB: Selected Interest Rates
Treasury Direct: I Savings Bonds Rates & Terms