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There are many ways of holding currency without being affected by inflation. This is what wealth management plans do. One simple tool used for this: > Treasur
by 21 8y ago
There are many ways of holding currency without being affected by inflation. This is what wealth management plans do.
One simple tool used for this:
> Treasury Inflation-Protected
Securities (or TIPS) are the inflation-indexed bonds issued by the U.S. Treasury. The principal is adjusted to the Consumer Price Index (CPI), the commonly used measure of inflation. When the CPI rises, the principal adjusts upward. If the index falls, the principal adjusts downwards.[8] The coupon rate is constant, but generates a different amount of interest when multiplied by the inflation-adjusted principal, thus protecting the holder against the official inflation rate (as asserted by the CPI)
- gamblor956 8y agoWhat they are doing is, by definition, not hoarding their cash. TIPS are a form of investment usually classified as very-low risk (but correspondingly relatively low gains).
- 21 8y agoYou are splitting hairs here. When people say that Apple is sitting on cash obviously they do not mean that they have 250 billion in one current bank account.
- simias 8y agoBut that's a very important distinction don't you think? Actually even having money stagnant in a bank account does somewhat contribute to the economy because of fractional reserve banking. On the other hand having bitcoins buried in a bunker contributes absolutely nothing.