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Thread: Series I Saving Bond

  1. #11

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    Here is a great article reinforcing the current advantage of buying I Bonds over TIPS.
    Also, just about anything else on a risk adjusted basis ( currently).
    The article and comments are very informative on this subject.

    So Motocat is absolutely right - load up, to the full extent possible.

    Very jealous Canadian here.


    A big question is, ( think Motocat alluded to this)
    What is the Treasury doing? If say 20% of the public ( that can) buy these to the full extent that they can, in the next 2 calendar years,
    then the cost of borrowing for the Treasury will grow significantly. Also the taxes are deferred until sale, which could be 30 years !!!

    Add this to the near 6% increase in SS payments starting in 2 months, you have to wonder what is going on ( madness or intentional?)

    One thing we can be certain of, they are not thinking of the common persons interests.

  2. #12

    Default Forgot the link.


  3. #13

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    Hey Brutus-

    I can get $10K of the I series Savings bonds for you as a gift, there is no limit on gifts to others! And I don't need the SS# of the recipient. Maybe in exchange for some bullion -- let me know...
    “Of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.”Daniel Webster (1782-1852)

  4. #14

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    With the current fixed rate on these current crop of I-bonds at 0.0%, count me out. Only the adjustable rate is at 7+%, and that's only good for the next 6 months. At the next adjustment date, it could go up, down, or stay the same. (My money is on down) I'm not interested until they start to bump-up the fixed rate. I've got a $5000 I-bond I bought not long after they were introduced that is earning over 3% on the fixed rate, with a current composite rate of over 10%. THAT'S the true beauty of the I-bond. I only wish I had been more prescient to have really loaded up back when the fixed rate was 3+%. The current inflation rate is just window dressing, IMHO, considering the 0.0% fixed rate, the minimum 1 year ownership and the 5-year penalty period. YMMV.
    Last edited by LeadHead; 11-03-2021 at 02:01 PM.
    "It's the lure of easy money - It's got a very strong appeal." - Glenn Frey (The Smuggler's Blues)

    "A wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." - Thomas Jefferson

  5. #15

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    Quote Originally Posted by motocat View Post
    Hey Brutus-

    I can get $10K of the I series Savings bonds for you as a gift, there is no limit on gifts to others! And I don't need the SS# of the recipient. Maybe in exchange for some bullion -- let me know...

    Thanks Motocat, really appreciate the offer, but I will have to pass for a few reasons

    1) I am trying to stay away from US dollar denominated assets that are not hedged to Canadian dollar. I think US CB is even crazier than Canada`s hence the 5%+ decrease in its value
    in past 12 months via Can$. That takes some doing when Canada is run by the poster child for how to be a socialist, woke, NWO leader.

    2) I think heavily weighted commodity countries will do well in higher inflationary environment, such as Canada, which will put even more strength to Can$
    Also BOC has already stopped its QE, entirely (just recently) and is signaling rate hikes next year, so ahead of US CB
    Love your country just not your currency

    3) tax implications. I know your tax law states you can defer the taxes on the I bond, but not sure what Comrade Trudeau and his henchmen may say about that.


    4) As much as I love the I bond rates you graciously advised us of, I love my bullion even more ha ha. I do not have as much as I should.

    Thanks again, for the offer. Love California, ( I`ll exclude the current state government )

  6. #16

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    Quote Originally Posted by motocat View Post
    On November 1st the interest rate on the U.S. Treasury Series I Savings Bond became 7.12%, very high! Before, it was at or near 0% for many years (under 1% for over 10 years). This is a dramatic change, I'm surprised there is not more news on it, and will this not effect interest rates in other areas? Or because there are limits on the purchase of such bonds ($10K per individual per year), will it not have much impact?

    No matter, though I've been anti-bond with all the low interest rate, 7.12% does have me getting back in, at least $10k, and I'll have my wife purchase $10K, then maybe each of my kids. Again, 7.12% is very good, wonder how long it will last, how long can the Treasury afford to pay such rates? (Then again, let's not forget how digits are created).

    Wondering if anyone else is biting on this hook, nothing like this has been out in a while, let's discuss....
    i thought 10 yr yield is ~ 1.55%
    https://www.cnbc.com/quotes/US10Y

  7. #17

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    Quote Originally Posted by yellowsnow View Post
    i thought 10 yr yield is ~ 1.55%
    https://www.cnbc.com/quotes/US10Y
    this is an I bond purchased directly from Treasury, not a regular treasury bond that can be traded on the secondary market.
    Motocat is correct in that the 6 month rate ( applies for next 6 months) is what he advises ( annualized)

  8. #18

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    Quote Originally Posted by LeadHead View Post
    With the current fixed rate on these current crop of I-bonds at 0.0%, count me out. Only the adjustable rate is at 7+%, and that's only good for the next 6 months. At the next adjustment date, it could go up, down, or stay the same. (My money is on down) I'm not interested until they start to bump-up the fixed rate. I've got a $5000 I-bond I bought not long after they were introduced that is earning over 3% on the fixed rate, with a current composite rate of over 10%. THAT'S the true beauty of the I-bond. I only wish I had been more prescient to have really loaded up back when the fixed rate was 3+%. The current inflation rate is just window dressing, IMHO, considering the 0.0% fixed rate, the minimum 1 year ownership and the 5-year penalty period. YMMV.
    I would say it is a good deal if you wanted to park your money for a year, and see how it goes.
    The only real factor to consider is alternatives to a government guaranteed, short term note, and doubt if anything is above 2%, but then again I am not US.

    So LeadHead, if you get 3.50% for 6 months guaranteed, and 0 on the fixed part and then lets say the government comes out and states that inflation only went up less than half as much the next 6 months (1.6%)
    So you get 1.6% more. ( .4, .3, .3, .3, .2, .1 ) That is 5.156% return ( it is compounded) You do not like the trend, so you ask for your money back

    You lose the last 3 months .6% so you end up with a 4.535% return.

    Given the current situation ( this is a very likely scenario, and is probably near the worst you would come out with. )

    As primarily a fixed income investor, I would immediately purchase a boat load of them, under the same terms, if I could, if same deal in my country.

    There is always the possibility of inflation continuing high, or higher, so maybe you keep them for awhile longer and you get the 7.12% or higher for first year.
    Also what an opportunity if markets crashes in a year or so and you have this money to go
    shopping with for the sales.

  9. #19

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    LeadHead wrote: With the current fixed rate on these current crop of I-bonds at 0.0%, count me out. Only the adjustable rate is at 7+%, and that's only good for the next 6 months. At the next adjustment date, it could go up, down, or stay the same. (My money is on down) I'm not interested until they start to bump-up the fixed rate.

    Reply: 7.12% is the fixed rate for six months, which they arrived at based on current inflation data. You think that in six months the data on inflation will go back to near zero like it was earlier in the year? Highly doubt they can pull that off so quickly, if so, everyone would start laughing at them. Still, even if they put it back down to zero -- this bond would still average over a year to over 3.5%, with principal staying the same -- far better than what any other CURRENT bond whose base value does not fluctuate. I doubt you'll see a long term fixed rate for a U.S. based bond go to to anything near 7%, at least for a while, I can't see how the government would afford that, I think this I Savings Bond can exist only because it's limited to $10K each -- many big guys would love to have this for far more!
    “Of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.”Daniel Webster (1782-1852)

  10. #20

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    Quote Originally Posted by vertical1 View Post
    Thanks motocat, Great tip. Now I do not know much about these. How would a person cash in the electronic I bond? Bonds for dummy's 101
    Here is my answer on Forbes "How to Cash in Savings Bonds
    Electronic I bonds can be redeemed via the TreasuryDirect website. Paper bonds can be cashed in at a local bank."

    Thanks again....bonds 101 for dummies
    Thomas Jefferson is credited with writing, “When injustice becomes law, resistance becomes duty.” The seceding states in the Civil War period issued a similar declaration using the word “tyranny” as opposed to “injustice.”

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