Wednesday, November 2, 2016

I-Bond Fixed Rate Falls Back to 0.0%

I got greedy. Thought that maybe, just maybe, all this talk of rising interest rate environments would bleed into I-Bond fixed rates. No such luck.

As of November 1st, the fixed rate for new purchases is back down to 0.0%, yet again. Should have locked in 0.1% in October when I had the chance.

Meanwhile, the MZM Own Rate seems to have peaked at a whopping 0.101% and has also been heading back down. I guess nobody bothered to burn cash to relieve the growing $14.5 trillion money of zero maturity (bank deposit) glut. It's a shame. Would have been quite a bonfire.

All this talk of bond bubbles has convinced many long-term savers to dump bonds (that still pay at least some interest over the long-term) and move to the safety of cash (which pays no interest over the long-term). For what it's worth, it has not convinced me. Still holding to maturity. Still earning the same interest. Still no desire to bury cash in my backyard.

Maybe I'm just stubborn or maybe I actually root for higher interest rates so that I can reinvest with more desirable terms when my bonds mature? I think it's the latter, for I, as a long-term saver and as a holder of long-term inflation-protected bonds, have never rooted for lower real interest rates. Not even once. And yet, lower real yields is all we seem to get.

Hey, do you suppose real yields will rise after the next recession? Will it become even easier to make money off of money? I only ask because I also have bets on hell breaching the 32 degree resistance level and a controversial patent on improving the aerodynamics of pigs. You gotta love long shots. Right? Sigh.


mab said...

Nobody expects the anti-Bond Vigilantes! Well, almost nobody. ;)

Stagflationary Mark said...

Credit is the lifeforce of the economy.

mab said...

I see that oil prices have been falling too. Like i-bond rates, that's a sure sign of impending inflation and rising interest rates.

Maybe Reddit is the new lifeforce of the election. Shut it down! Now!

Stagflationary Mark said...

Jordan's Furniture is currently offering 72 months @ 0.0% on select TempurPedic mattresses!

The shadowstats followers should be all over this! Like flies on an unpolished turd! They are practically giving these mattresses away to the "imminent" hyperinflationists!!

Why is the mainstream media not pointing out the bargain here? A deal of the century hyperinflation special report!!! ;)

Mr. Slippery said...

I keep buying i-bonds every month without even knowing the rate. Probably not the best strategy, but it's also not my only strategy. My 7-year bond ladder is giving me a blended yield-to-worst of 2.432065789%. Slightly better than inflation if nothing defaults. My 403b is earning a fixed 1.9%, and my vested pension is...probably underfunded but it looks good on paper :)

Stagflationary Mark said...

No worries. Underfunded pensions will be a thing of the past if the stock market rises by 15% each and every year, inflation stays under 2%, the Fed has permanently put an end to recessions, and/or the Logan's Run Act is enacted several centuries ahead of schedule, lol. Sigh.