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So, anyone holding cash is a guaranteed loser! The Fed has stated a clear policy to keep the "real rate" of interest negative until a clear economic recovery is in place.

This is true only for the short term part of the yield curve. I think the Fed can purchase long term bonds but, so far, they have not done it.

The bottom line is that it pays to lengthen the term of your investments through a bond or CD ladder or some other scheme. The after tax return of 5 year T-notes or CDs stinks, but it is still better than a negative real rate.

ayduda
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