Click to enlarge.
"Saver" the long-term banana parabola! ;)
As is the case with all parabolas, this parabola is absolutely guaranteed to fail at some point (stores will never pay you to take their bananas).
Although this chart points to long-term banana deflation in our future, I would still consider investing a large sum of money to lock in a lifetime supply of bananas at today's prices (if they kept indefinitely). Why not? I absolutely love bananas. They are my favorite fruit. At the very least, I could become king of the banana republic if we all become homeless someday, lol. Sigh.
In the real world, the point of parabolic failure could be long after I'm dead and buried. In the meantime, I'm therefore all about locking in long-term real yields when and where I can. As seen in the following link, not all bears feel as I do though.
December 20, 2012
Interest Rates Near Zero Put Savers in a Bind
“I’ve sent e-mails to [Fed Chairman Ben] Bernanke. I know he doesn’t read them,” says Hernandez.
Sent emails to Bernanke knowing full well he doesn't read them? Might I ask what that was intended to accomplish? Here's an idea. Start a sarcastic blog. Tell the world. Works for me, lol. Sigh.
Further, if I did write emails then I'm not sure what I would have said. Congratulations for continuing the long-term death of real yields? Real yields have been dying for more than 30 years. It's not like Bernanke invented the idea or even has all that much power over the trend. We can't all expect to make out like bandits as more and more people notice the cracks in the economic dam. It's the dam that ultimately provides the interest.
What can savers do about this Fed-induced predicament besides complain? Hernandez’s choice is to stick with the safest, shortest-term securities—low yields be damned. That strategy may make sense if you’re going to take money out soon, or if you’re so risk-averse you sell in a panic whenever the market hiccups. Hernandez, who lives in Henderson, Nev., shies away from riskier assets because he thinks the Fed is manipulating markets. “I believe we’re sitting on a house of cards,” he says. “Every bit of our money is going into CDs and money markets now.”
Every bit of his money sits at the short-end of the curve earning next to nothing? In my opinion, that sounds about as useful as emailing Fed chairmen or burying paper dollars in one's backyard. I find it hard to believe that either strategy will pay off over the ultra long-term.
Just the opinions of an anonymous banana loving fool on the Internet. Take them for what they are worth, perhaps 70 cents a pound, for the bananas that is. The commentary is absolutely free.
If you came here looking for actual banana advice then, well, um, I suppose I could offer something. In theory, I think the following video is work safe. Look, it's just bananas! There is no law against eating them in public! Right?
BLS: CPI Databases
File:Banana fruit on white background.jpg