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Author: brucedoe Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 457419  
Subject: Re: Financial Repression: why you should care Date: 12/15/2012 1:51 PM
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yoda

Excellent. A thing that is even more insidious is if Treasuries are paying high rates, but inflation is even higher (as in the late 1970s and early 1980s so that "real rates" are still negative). I always thought that you couldn't keep ahead of inflation by buying Treasuries. I was recognizing Financial Repression without knowing it.

It is why I went to buying stocks early in my career, eventually concentrating on increasing dividend stocks. Early in this century, I got smoked out and started buying commercial bonds (for me, apparently over as our last GE bonds are called) and preferred stocks (still open to this).

Much to my surprise, we have a callable CD paying 3.25% that is listed at a more than 4% premium! You may not beat inflation with CDs but they are one of the few places where you can get your principal back when you need it.

Another form of financial repression is the official inflation rate which I suspect is considerably less than nearly everyone's personal inflation rate. And the politicians want to jimmy it some more to make it even lower to lower the inflation adjustments to social Security, Federal endowments, and the like.

brucedoe
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