U.S. sells debt with a negative yield for 1st time
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Re: U.S. sells debt with a negative yield for 1st time
If QE2 can raise inflation toward to 2 percent, a level which Fed Chairman Ben Bernanke recently cited, investors will profit from a widening in the yield gaps between TIPS and regular Treasuries. This could happen even if the real yields on TIPS remain negative, analysts said
The game continues!!I would love to know who bought these!!!
If QE2 can raise inflation toward to 2 percent, a level which Fed Chairman Ben Bernanke recently cited, investors will profit from a widening in the yield gaps between TIPS and regular Treasuries. This could happen even if the real yields on TIPS remain negative, analysts said
The game continues!!I would love to know who bought these!!!
brucefan
EOG Dedicated
Re: U.S. sells debt with a negative yield for 1st time
Just wait until the QE2 docks next week
A Quick Glance At Real World Inflation
Submitted by Tyler Durden on 10/26/2010 16:36 -0500
The Casey Report provides a useful glance at the real inflation currently ravaging items that are actually purchased by Americans, not those captured by the Fed's BLS statistics: "On average, our basic food costs have increased by an incredible 48% over the last year (measured by wheat, corn, oats, and canola prices). From the price at the pump to heating your stove, energy costs are up 23% on average (heating oil, gasoline, natural gas). A little protein at dinner is now 39% higher (beef and pork), and your morning cup of coffee with a little sugar has risen by 36% since last October." Of course, the ongoing deflation in items purchases requiring leverage will continue to skew the CPI so far south to make all those who bought 5 Year TIPS yesterday at negative yields end up losing money on the transaction.
Chart of the Week: Inflation in the Real World, by Jake Webber of Casey Report
As is often the case, there is a big difference between what the government statistics are reporting and what?s going on in the real world. According to the most recent inflation reading published by the Bureau of Labor Statistics (BLS), consumer prices grew at an annual rate of just 1.1% in August.
The government has an incentive to distort CPI numbers, for reasons such as keeping the cost-of-living adjustment for Social Security payments low. While there?s no question that you may be able to get a good deal on a new car or a flat-screen TV today, how often are you really buying these things? When you look at the real costs of everyday life, prices have risen sharply over the last year. For simplicity?s sake, consider the cash market prices on some basic commodities.
On average, our basic food costs have increased by an incredible 48% over the last year (measured by wheat, corn, oats, and canola prices). From the price at the pump to heating your stove, energy costs are up 23% on average (heating oil, gasoline, natural gas). A little protein at dinner is now 39% higher (beef and pork), and your morning cup of coffee with a little sugar has risen by 36% since last October.
You probably aren?t buying new linens or shopping for copper piping at the hardware store every day, but I included these items to show the inflationary pressures on some other basic materials that will likely affect consumer prices down the road.
The jump in gold and silver prices illustrates that it?s not just supply and demand issues driving the precious metals higher ? the decline in purchasing power of the dollar is also showing up in the price of physical goods. It is because stashing wheat and cotton in the garage is an impractical way to protect purchasing power that investors are increasingly looking to protect themselves with the monetary metals ? a trend that is now very much in motion.
Just wait until the QE2 docks next week
A Quick Glance At Real World Inflation
Submitted by Tyler Durden on 10/26/2010 16:36 -0500
The Casey Report provides a useful glance at the real inflation currently ravaging items that are actually purchased by Americans, not those captured by the Fed's BLS statistics: "On average, our basic food costs have increased by an incredible 48% over the last year (measured by wheat, corn, oats, and canola prices). From the price at the pump to heating your stove, energy costs are up 23% on average (heating oil, gasoline, natural gas). A little protein at dinner is now 39% higher (beef and pork), and your morning cup of coffee with a little sugar has risen by 36% since last October." Of course, the ongoing deflation in items purchases requiring leverage will continue to skew the CPI so far south to make all those who bought 5 Year TIPS yesterday at negative yields end up losing money on the transaction.
Chart of the Week: Inflation in the Real World, by Jake Webber of Casey Report
As is often the case, there is a big difference between what the government statistics are reporting and what?s going on in the real world. According to the most recent inflation reading published by the Bureau of Labor Statistics (BLS), consumer prices grew at an annual rate of just 1.1% in August.
The government has an incentive to distort CPI numbers, for reasons such as keeping the cost-of-living adjustment for Social Security payments low. While there?s no question that you may be able to get a good deal on a new car or a flat-screen TV today, how often are you really buying these things? When you look at the real costs of everyday life, prices have risen sharply over the last year. For simplicity?s sake, consider the cash market prices on some basic commodities.
On average, our basic food costs have increased by an incredible 48% over the last year (measured by wheat, corn, oats, and canola prices). From the price at the pump to heating your stove, energy costs are up 23% on average (heating oil, gasoline, natural gas). A little protein at dinner is now 39% higher (beef and pork), and your morning cup of coffee with a little sugar has risen by 36% since last October.
You probably aren?t buying new linens or shopping for copper piping at the hardware store every day, but I included these items to show the inflationary pressures on some other basic materials that will likely affect consumer prices down the road.
The jump in gold and silver prices illustrates that it?s not just supply and demand issues driving the precious metals higher ? the decline in purchasing power of the dollar is also showing up in the price of physical goods. It is because stashing wheat and cotton in the garage is an impractical way to protect purchasing power that investors are increasingly looking to protect themselves with the monetary metals ? a trend that is now very much in motion.
Re: U.S. sells debt with a negative yield for 1st time
Big investors who are expecting run-away inflation soon are piling into these things. Talking deflation and betting on inflation.
Big investors who are expecting run-away inflation soon are piling into these things. Talking deflation and betting on inflation.
Re: U.S. sells debt with a negative yield for 1st time
Exactly!!The people who are making the rules of the game!!They will always come out ahead.