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re: Gold: It's basically f'd
Posted on 2/25/11 at 9:48 pm to TheHiddenFlask
Posted on 2/25/11 at 9:48 pm to TheHiddenFlask
quote:
Also, why is gold superior to TIPS?
Serious question here. With TIPS the increase in value so to speak is based upon the CPI. However, the CPI does not include energy or food. I know my gas cost has risen a bunch. I have a 28 month old girl and milk has gone from 3.59 to 4.29 in the last 2 years. So to me TIPS are getting screwed. Why wouldn't you be better off buying rising rate funds and shorting the Lehman bond index?
Posted on 2/25/11 at 11:07 pm to saint308
quote:
saint308
TIPS have significant flaws, to be honest. I was just throwing out an easy one. The other two are much more suitable, though.
Posted on 2/26/11 at 10:55 am to saint308
quote:
However, the CPI does not include energy or food. I know my gas cost has risen a bunch.
If you truly believe this I suggest going to TreasuryDirect and researching how the inflation factor applied to TIPS is really calculated. This is coming from the guy that bought 30-year TIPS on 2/17/2011 at auction.
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