Bondbuyers expect Interest Plus TIPS
Just when you thought the US financial system cannot possibly get more absurd . . .
The US Treasury not only shovels billions upon billions in interest to bondbuyers who don't lift a finger to deserve it, but now they intend to increase the issue of inflation protected securities from the current 8 percent of the nation's debt portfolio upto 13 percent.
Bondbuyers are simply NOT prepared to shoulder ANY RISK WHATSOEVER that their UNEARNED money will devalue, even though inflation is a DIRECT result of their voracious greed.
The U.S. Treasury's issuance of inflation-protected securities (TIPS) is likely to increase as a share of the government debt portfolio, a Treasury Department official said on Wednesday.Of course! Why "buy" a bond subject to inflation, when you can buy one protected from it? Are there ANY drawbacks to this no-brainer?
"We do not announce future issuance ahead of time, but projections of issuance based on current auction sizes and frequencies would lead to TIPS as a share of the portfolio reaching 13 percent in 2011 from 8 percent now," Treasury Assistant Secretary Emil Henry said in remarks prepared for delivery to a conference in Paris.
Henry's remarks were distributed by the Treasury Department in Washington.
Demand for Treasury inflation-linked securities is strong as seen from the growing market for such securities, Henry said. There are currently over $300 billion of TIPS outstanding and about $800 billion of inflation-indexed securities worldwide, he said.
Liquidity in the TIPS market is improving, Henry said. Daily turnover in TIPS has more than doubled over the three years 2002-2005, he said.
If the U.S. economy suffered from deflation, then these securities wouldn't be very useful.Recall the last time the US economy suffered from deflation - NEVER. Central bankers won't let it happen. They make their money by inflating! To them, deflation is the anti-christ.
TIPS are a no-brainer, alright - it requires a government with NO BRAINS to ISSUE them.