Wednesday, October 8, 2008
A quick post, as I'm mixed up with other things for a bit. In the context of a global rate cut, already-elevated inflation, a weak dollar and gold over $900/oz., I find it amazing that long-maturity TIPS have gotten so cheap. You can buy TIPS maturing in 2029 that have a real yield of 2.8%, and they are priced to the assumption that inflation will be no more than 1.4% a year for the next 20 years. Getting a government guaranteed real yield of almost 3% for the next 20 years is almost too good to be true. Very few times in your life does an opportunity like that come along.
Posted by Scott Grannis at 9:18 AM