What Would I Do Buy Inflation Indexed Bonds Or Regular Bonds?
What Would I Do Buy Inflation Indexed Bonds Or Regular Bonds? Friday November 20, 2009#spacer{clear:left}#abc #sidebar{margin-top:1.5em}zSB(3,3) Contrary to what is seems mainstream America thinks (and when it comes to investing, it seems rarely is the consensus view correct), right now (November 20, 2009) deflation is of much more concern than inflation, and this may be the case for the next year or two. Stop and think about what causes inflation. No, it’s not federal deficits. Inflation is caused when demand exceeds supply. When people have the money to buy more goods and services than the economy can produce then prices rise. Now, think about where our economy is at right now. Unemployment is high and rising. Consumer spending is subdued. People are focused on paying down debt and saving money. This is not the right scenario for inflation to be a problem. I’m not saying inflation isn’t coming, but right now, it’s not an issue. As a matter of fact if you bought TIPS (Treasury Inflati
