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What awesome arbitrage opportunity would exist if the government was understating inflation?
by SpelingBeeChamp 5y ago
What awesome arbitrage opportunity would exist if the government was understating inflation?
- ChrisLomont 5y agoGoogle any inflation linked asset, from bonds, ETFs, swaps, all sorts of derivatives. If you know inflation is consistently wrong, all such things are mispriced. Then it's simple to hedge against non inflation versions of the same, or buy derivatives constructed against them, to extract the risk free difference. If you dig around you'll find finance papers measuring such things, demonstrating no one has found any such exploitable gaps. Plenty of groups try.