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|Subject: Re: Worst case for bond funds||Date: 5/22/2013 8:59 PM|
|Author: StuyvesantGrad70||Number: 34963 of 35576|
Unfortunately your principal might not have the same amount of buying power because of inflation.
Might? Has there ever been an appreciable period of time in which this wasn't true?
Following the Panic of 1837: which was spurred by all banks' insistence on accepting payments in either silver or gold coinage alone, the US economy decreased by almost 30%.
The Great Deflation: From 1870-1890 there was a drastic decline in the prices of goods, raw materials, labor and services throughout US. The cause of this deflationary period is attributed to the return to gold standard post Civil War. From 1876-79, the price level fell on average almost
5 percent per year.
The Great Depression:
Years when the CPI was negative:
1926 -1.5 percent
1927 -2.1 percent
1928 -1 percent