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Thread: Series I Saving Bond

  1. #21

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    then it's a no brainer to invest in some 7% bond.
    Even good dividend stock yields 3-5% and stocks still have risk
    sounds too good to be true.
    Even the best US corp BBB rating bond yield is 2.45%
    Only CCC bond gets 7.5%
    Last edited by yellowsnow; 11-03-2021 at 09:34 PM.

  2. #22

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    Quote Originally Posted by brutus2 View Post
    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.
    Brutus, I do not disagree with anything you wrote. Still, I find it unbelievable (and insulting) that they have kept the fixed rate at 0.0. for these many years, especially now.

    Ofcourse, the income from the bonds is taxable, so there is also that to factor into your returns.
    Last edited by LeadHead; 11-04-2021 at 08:47 AM.
    "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

  3. #23

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    Quote Originally Posted by motocat View Post
    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!
    The rate may be "fixed" for 6 months, but it is not the FIXED RATE, it's the COMPOSITE RATE, but you know that. Semantics.

    That said, I'm certainly not looking to start any kind of argument. I merely stated MY opinion, for what it's worth. I am not interested in I Bonds unless the permanent fixed rate is also increased. 0.0% is an insult. It's almost as if the really don't want to actually sell bonds, and it is one mechanism to discourage people. Take for example, the paltry rate paid on Series EE bonds - for heaven's sake, why do they even still bother? It's like they think if they make the rate low enough, nobody will buy them, and they can all set around in their offices eating bon-bons and watching soap operas instead of doing their jobs. In MY opinion. You like the current deal, cool beans.
    Last edited by LeadHead; 11-04-2021 at 09:17 AM. Reason: clarification and spelling
    "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

  4. #24

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    Yellow Snow wrote: Then it's a no brainer to invest in some 7% bond.
    Even good dividend stock yields 3-5% and stocks still have risk
    sounds too good to be true

    Yes, for me it's a no brainer, so I'm buying another $10K as a "gift" for my daughter today. Indeed, this may be "too good to be true", however I've seen to good to be true happen before, consider your cyber currency gain! This is the U.S. treasury we are speaking about, if they mess this up, all the confidence they still have with many people around the world will be gone, so I think that is highly unlikely. Easy choice for the amounts I am limited to (I would never go all in) -- which is why I started this thread. While I've been anti-bond for years now, this one is simply to good to pass up, so wanted to see what other members thought, given it's made me pro-bond for the first time in over a decade.

    That said, should hyper-inflation come about during the next year, this indeed can be seen as a trap, it will be "to good to be true". Even then, however, given my PM holdings, I'll be doing A OK, but for 7% with no change to base, I'll go with "Don't fight the Fed"! (co-conspirator with the U.S. treasury).
    “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)

  5. #25

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    Thanks for the tip moto. I loaded up with some extra funds. Sadly it appears you can only buy paper when you file your return. I am guessing come April rates will go down significantly…

  6. #26

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    If this isn't a harbinger of things to come (fiat worth less), I don't know what is. Still, inflation is pretty hot so the return will be minimal, still a better place to park some dollars over just sitting. I'm considering rolling the last of my emergency savings into the market, but maybe this is a better bet.

  7. #27

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    Late reply, 7% is good, but 13% is better (Sibanye Stillwater) and you can sell Sibanye any day the S.M. is open. No need to tie up your cash for a long time not knowing what the interest rate may change to plus mining companies can gain in value plus still return your 13% as long as you don't sell.
    American Legion Preamble: https://www.legion.org/preamble

  8. #28

    Default Series I bonds

    A while back someone posted a thread regarding the series I bonds. Can’t seem to find. Today they are paying just under 10% just wondering if others are taking advantage of this deal

  9. #29

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    trying,
    This may be the thread you seek
    Series-I-Saving-Bond=I+bonds
    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.”

  10. #30

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    Yup, certainly did, back in November. And to think of so many who had this opportunity, who instead kept so much wealth in low interest rate long term bonds that have now fallen 15-20% in value. Where were the "financial experts" then, warning against keeping the other bonds? Ryan??
    “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)

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