Technical Ben wrote:Also, also, AFAIK, they offset the borrowing against inflation. Being really cheeky, they borrow 1 million, and wait until inflation reduces it to 750 thousand, then pay it back.
Quizatzhaderac wrote:Technical Ben wrote:Also, also, AFAIK, they offset the borrowing against inflation. Being really cheeky, they borrow 1 million, and wait until inflation reduces it to 750 thousand, then pay it back.
That can only work once, and only if the inflation is unexpected. Investors won't lend money out at less or equal to what they expect inflation to be. Once a government inflates it''s monetary supply to pay off debt investors will expect them to do so for decades afterwards.
Also be aware of how long civil contracts and trusts are good for in the countries you create them. I think trusts are only good for 100 years in the US.
All Shadow priest spells that deal Fire damage now appear green.
Big freaky cereal boxes of death.
WarDaft wrote:Don't governments primarily borrow from the kind of banks that can just quietly define more money in their accounts, but restrain from doing so when a government isn't borrowing from them because they like being in charge of a currency that actually has value?
HungryHobo wrote:that and governments can mandate that their own citizens loan them money.
I heard somewhere tha the yield on some US treasuries are bellow the rate of inflation if anyone can confirm/refute and that the SS fund is legally obliged to use it's funds to buy US treasuries.
Turtlewing wrote:Investing with time dilation is essentually the same as without (only you have less ability to moniter your investments). Since no information from the future is available you still have to make speculative choices that could either be right or wrong. Given the increased time of the planned investment and the lessened ability to "bail" if things go bad I'd expect near-light investing to be higher risk than normal investing.
gmalivuk wrote:If you were alive in 1700, which companies would you have invested in to make a consistent 4%? What companies from that time even still exist today?
No offense intended, but without a citation I"m going to assume you're making some mistake like confusing current interest rates, with rates expected at issuing.HungryHobo wrote:well last september they were apparently buying them for some other reason....
In the time period that the FDIC has existed it's been exceeding rare that anybody has lost a penny due to that limit. When a bank goes under, the FDIC generally arranges for another bank to take over it's liabilities (and assets). Over the long term the bigger concern is if organizations like the FDIC exist.sehkzychic wrote:The only caveat is that the FDIC only insures your money to a certain threshold...
If you bought a Dow Jones index at it's 1929 peak, and sold it at it's 2008 bottom, and adjusted for inflation you'd get a 36% gain. That's lousy for a 79 year period, however 1) This is cherry picking the worst local time time buy and the worst local time to sell 2) This is ignoring dividends.gmalivuk wrote: If you take the long-running average, such as over the course of 300 years, most investment schemes will work out to be pretty much indistinguishable from inflation.
mmmcannibalism wrote:Levi wrote:I can't remember the name of the book right now, but I read one once where there was a class of people who lived outside of time and facilitated trade between times. So, for example, times with lots of trees could trade with times that had huge industrial complexes.
Would this work at all? It seems like weird things would keep happening, but I can't really wrap my mind around it enough to figure out exactly where everything would go wrong.
Besides every time travel paradox possible?
Quizatzhaderac wrote:No offense intended, but without a citation I"m going to assume you're making some mistake like confusing current interest rates, with rates expected at issuing.HungryHobo wrote:well last september they were apparently buying them for some other reason....
Beginning in late 2010, Treasury Inflation Protected Securities (TIPS) began trading with a negative yield – meaning that investors were paying the government for the privlege of holding its debt, rather than the other way around. For example, on July 17, 2012, the 5-year TIPS had a yield of -1.21% while the 10-year stood at -0.64%, the 20-year at -0.01%, and the 30-year at 0.37%. How can this be? And why would investors accept a negative yield?
The answer is that the yield on a TIPS bond is equal to the Treasury bond yield minus the rate of expected inflation. As a result, when standard Treasury bonds are trading at yields that are below the expected inflation rate – as has been the case since late 2010 – TIPS yields will fall into negative territory.
Let’s look at July 17 again as an example. On that day, the 10-year Treasury note was yielding 1.49%. However, based on the comparative yields of TIPS versus plain-vanilla Treasuries, investors were expecting inflation of about 2.13% in the next ten years. If you subtract this 2.13% from the 10-year yield of 1.49%, the result is a negative number for the 10-year TIPS: -0.64%. As long as Treasuries continue to offer yields below the rate of expected inflation, TIPS will remain in negative territory.
Why are investors accepting negative real (after inflation) returns in Treasuries? The answer is that investors’ quest for safe investments amid concerns about the debt crisis in Europe drove the yield on plain-vanilla Treasuries below the rate of inflation. In other words, safety is such a high priority that investors are willing to accept a negative real (after inflation) return on Treasuries in exchange for a guaranteed return of principal.
Or in general, the purchasers of a security expect more returns from it than the general population expects.about.bonds.com wrote:Looked at another way, a buyer of the 10-year TIPS at -0.64% expects that the inflation adjustment on TIPS will be more than 2.13%, which would allow he or she to come out ahead of the 2.13% on the 10-year plain-vanilla Treasury note.
- Invest money in a bank
Fly near the speed of light away from Earth, then back againPut yourself in anabiosis or cryostasis, or go hike in himalayan mountains (ohmmmm).
- You experience a week or so, the bank experiences say a year
- So you get loads of interest in a short time (for you)