Wednesday, May 11, 2011

Civilian Employment Update

May 6, 2011
Civilian Employment

Spot that hiring spree in the chart above and win a prize.

MaxedOutMama posted concrete evidence today that the hiring spree was illusionary.

So what does this mean? The "sure thing" inflation trade is, was, and will be at risk. I use past tense because
silver is down 29% since its peak in late April.


The divergence between IEF and TIP today also shows the risk. They are similar treasury bond funds. IEF offers no inflation protection. TIP does. IEF was up 0.36%. TIP was down 0.32%.

In case you are interested, one of my larger TIPS bonds recently matured. I was tempted to put the money back into TIP but opted instead to earn 1% in an online savings account. It is money I will be needing over the next few years and I felt that the risk/reward for TIP wasn't sufficient. The bulk of my nest egg does sit in long-term TIPS and I-Bonds though.


dearieme said...

Good point. Our car is 17 years old. Where should we keep the cash for our next-car fund? Happily, Her Majesty's Government has just released a new issue of our (rather generous) equivalent of your I-bond, which is a good deal if you keep it for a year-and-a-day, and has a life of up to five years. I shall think furiously about it.

Stagflationary Mark said...


It is a tough investment environment for money you know you will need soon. The central bankers would prefer you spend it right now. You could always just buy the car now and seal it in plastic wrap until you need it I suppose, lol. Sigh.

Stagflationary Mark said...

I'm joking of course. If we hyperinflate, I reserve the right to say that I was joking that I was joking though. ;)