New I Bond Rate - May 1, 2015

Discussion of the Cash portion of the Permanent Portfolio

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Bean
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New I Bond Rate - May 1, 2015

Post by Bean » Fri May 01, 2015 1:14 pm

Fixed Rate = 0.00%
Inflation Rate = -0.80%
Composite rate = 0.00%


:'(
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ochotona
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Re: New I Bond Rate - May 1, 2015

Post by ochotona » Fri May 01, 2015 2:33 pm

OMG, I just bought a bunch of those I-Bonds! No better than my Credit Union, and less liquid!
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sophie
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Re: New I Bond Rate - May 1, 2015

Post by sophie » Fri May 01, 2015 2:34 pm

Yikes.  Glad I skipped buying i bonds last year...

It's also strange to see outright deflation with negative interest rates on T-bills, while yields on long bonds are increasing.  It looks like the price deflation was almost entirely due to the drop in oil prices.  Kinda sucks for me because about the only consumer item that's actually dropped in price is gasoline, which is the one thing I have little use for.  The reduction in oil prices was not reflected anywhere else, it seems.  Someone is making out like a bandit.
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Re: New I Bond Rate - May 1, 2015

Post by Pointedstick » Fri May 01, 2015 2:46 pm

I thought CPI excluded energy prices?
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dualstow
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Re: New I Bond Rate - May 1, 2015

Post by dualstow » Fri May 01, 2015 2:49 pm

sophie wrote: Yikes.  Glad I skipped buying i bonds last year...
Me too. I remember some of our convo about that back then. I went with 3-YR treasury notes.

Remember all the hoopla about TIPS at bogleheads' forum?
forcemeat, ie stuffing, is etymologically related to ‘farce’. When you say something is a farce, a joke, you’re saying something is a bunch of stuffing.
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sophie
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Re: New I Bond Rate - May 1, 2015

Post by sophie » Fri May 01, 2015 3:05 pm

Pointedstick wrote: I thought CPI excluded energy prices?
I think that's called "core CPI" (less food and energy).

Yes, TIPS owners must be crying their eyes out right now. 
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Re: New I Bond Rate - May 1, 2015

Post by dragoncar » Fri May 01, 2015 4:33 pm

Why the sad face?  .8% real is better than 0% real!  I thought people were glad Ibonds couldn't go negative for just this reason.
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Re: New I Bond Rate - May 1, 2015

Post by dualstow » Fri May 01, 2015 5:42 pm

I want to give credit to Moda, btw. I got the idea to buy those notes from a post he wrote a long time ago.
forcemeat, ie stuffing, is etymologically related to ‘farce’. When you say something is a farce, a joke, you’re saying something is a bunch of stuffing.
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Re: New I Bond Rate - May 1, 2015

Post by barrett » Fri May 01, 2015 6:20 pm

dragoncar wrote: Why the sad face?  .8% real is better than 0% real!  I thought people were glad Ibonds couldn't go negative for just this reason.
The composite rate of return on new bonds is 0%, not .8%. Can someone explain to me why anyone would lend the government money for nothing in return? Safer than a bank? A mattress?
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ochotona
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Re: New I Bond Rate - May 1, 2015

Post by ochotona » Fri May 01, 2015 6:25 pm

Corporations can't have huge piles of paper money lying around.
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Re: New I Bond Rate - May 1, 2015

Post by Pointedstick » Fri May 01, 2015 6:57 pm

Corporations can't buy I-bonds, I don't believe, but the principle is the same for things they can buy, like T-bills.
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ochotona
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Re: New I Bond Rate - May 1, 2015

Post by ochotona » Fri May 01, 2015 7:13 pm

Pointedstick wrote: Corporations can't buy I-bonds, I don't believe, but the principle is the same for things they can buy, like T-bills.
Right! What you said!
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