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Buying TIPs is risky because like you said you’re basically allowing the government to determine inflation. They’re not linked to real inflation. Keep in mind
by ed25519FUUU 5y ago
Buying TIPs is risky because like you said you’re basically allowing the government to determine inflation. They’re not linked to real inflation.
Keep in mind bank credit ratings in 2008. They were AAA for a LONG time!
- gus_massa 5y agoHere in Argentina we had a fake number for inflation, to pay less to people that got "inflation" adjusted bonds, but the side effect was that we paid more to people with "grow" adjusted bonds. [I'm not sure about the details, but it was something like grow=GDP_change/inflation.]