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I-bonds eeew

May 2nd, 2008 at 04:19 am

Saving log - $0 tip box
Spending log - $1.19 coffee + $.84 apple

First day back to work. DJ friend bought me belated birthday lunch today, so it was a nearly no spend day.

Checked out the new I-bond rates set this May 1. I-bond rates have two component - a fixed rate that is set for the life of the bond, and the variable rate based on inflation, set every six months. You want to keep your eye on the fixed rate because that was going to be what was going to protect your I-bond from inflation. I figured that the fixed rate was going to be crappy. It was crappier beyond my wildest dreams:

0.0%

In other words no protection from inflation and if there's deflation (hey, you never know), these I-bonds can actually lose money. I guess that's what the US Treasury is gambling on - lots of inflation and no deflation. In addition, the US Treasury is trying to move savers to T-bills away from savings bonds - you can buy t-bills in $100 increments, while you can't buy more than $5000/yr in savings bonds. Don't know how that's going to work out for the US in the future.

Anyway, I'm glad that I've bought extra I-bonds last week and finished my position.

My photo for today. We had the May Day why-not-inconvenience-the-commute rally at 4-6 pm. Nice to know that in Seattle, when the revolution comes, it will be catered:

Posted in Fixed Income | 4 Comments »

4 Responses to “I-bonds eeew”

  1. Keiran Says:
    May 2nd, 2008 at 04:40 am 1209703254
    1209703254

    I laughed at your 'catered' comment. Wink

  2. Broken Arrow Says:
    May 2nd, 2008 at 12:04 pm 1209729866
    1209729866

    Snort at the catered comment.

    I-bond... wow. Didn't think that the fixed rate will fall to 0%. Still a hedge against inflation, but hardly enticing beyond that now....

  3. PauletteGoddard Says:
    May 3rd, 2008 at 02:16 am 1209780993
    1209780993

    My wimpy coworkers bailed the building before 3:45 pm. I hung in until 5 pm, then went into the tunnel, and caught a bus that had 1/4 of its regular ridership home. Either a whole lot of rush hour bus travellers were in the march, or I commute with candyasses.

  4. baselle Says:
    May 3rd, 2008 at 04:04 am 1209787448
    1209787448

    Eh, I was hard core the other way - I stayed at work until about 6:30 or so (blissful quiet), then took a surface street bus. It could be that we commute with candyasses - Mariner games are a whole lot worse. $4/gal gas must be attracting the amateurs.

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