Tuesday, July 12, 2011

The Trend Is Your (Saver's) Nightmare


Click to enlarge.

The rate on 5-year TIPS hit -0.54% today. That's a new low.

I suppose you could try waiting for a return to "normal" and/or greener pastures. Good luck on that one.

Where's the recovery in real yields like we saw in 2005-2007? It seems to be missing in action.




Source Data:
FRB: Selected Interest Rates
U.S. Treasury: Daily Treasury Real Yield Curve Rates

7 comments:

getyourselfconnected said...

But negative rates are supposed to spur a wicked pissa recovery?? What happened?

Stagflationary Mark said...

GYSC,

I'm glad you asked (even if it was a rhetorical question ;)).

I don't always agree with Mish but I definitely think the following is a great article and most certainly applies to this post.

Hello Ben Bernanke, Meet "Stephanie"

Stephanie, it's a little known fact that inflation benefits those with first access to money, such as the banks, the wealthy (via rising asset prices), and the government (think rising sales taxes and property taxes when prices go up).

Everyone else gets screwed.


It was my goal not to be screwed. That's one reason why I turned to long-term TIPS and I-Bonds starting in 2000. You can't buy long-term TIPS unless you have the resources to do so though. If you need the money in the short-term then you can't afford to take the risk. The Stephanies of the world truly are screwed. Shame on us all for allowing it to happen.

Watchtower said...

Chuck Norris gets 10% on his 5 year TIPS.

getyourselfconnected said...

Well, I did try my best but it seemed saving the banking sector and screwing everyone else was more important in a systemic risk sort of way. Disgusting. I remember that Mish piece, it was very good.

Stagflationary Mark said...

Watchtower,

Not only does Chuck Norris get 10% on his 5 year TIPS, but he gets 20% on his 5 year FISTS! ;)

GYSC,

The screwing will continue until morals improve. I think that's the saying anyway. Sigh.

Stagflationary Mark said...

"We're better than we were three years ago." - Jim Cramer

Yeah, right.

Stagflationary Mark said...

The Debt to the Penny and Who Holds It

7/12/08: $9.50 trillion
7/12/11: $14.34 trillion
50.9% increase

Civilian Employment

June 2008: 145.7 million
June 2011: 139.3 million
4.4% decrease

That's roughly $35,000 in extra public debt per employed worker. Oh yeah, things are looking so much better than three years ago. Peachy.

($14.34 trillion - $9.50 trillion) / 139.3 million = $34,745