Goldtent TA Paradise

TGIF

1. Steins1 says:

   November 2, 2018 - 5:29 pm at 5:29 pm

   Treasury inflation-protected securities, or TIPS, present a very convenient way for investors to gain exposure to fixed-income instruments guaranteed by the U.S. government that are protected against inflation. … Thus, investors are protected against deflation.

2. Steins1 says:

   November 2, 2018 - 5:30 pm at 5:30 pm

   Like regular Treasury bonds, TIPS pay interest twice a year based on a fixed rate. TIPS differ from ordinary Treasuries in that the principal value of TIPS adjusts up and down based on inflation as measured by the Consumer Price Index (CPI). The rate of return investors receive reflects the adjusted principal.

   • Fullgoldcrown says:

     November 2, 2018 - 6:52 pm at 6:52 pm

     OK So what does it mean when TIP is crashing ?

     The value of the TIP Bond is dropping …does that mean Deflation in coming fast ?

   • pedro_deleon says:

     November 2, 2018 - 6:59 pm at 6:59 pm

     “inflation as measured by the Consumer Price Index (CPI).”

     All you need to know.
     Worthless as a savings or investment vehicle.
     Probably losing 3-5% of your purchasing power every year on the measurement error/gap.

     • Fullgoldcrown says:

       November 2, 2018 - 7:28 pm at 7:28 pm

       Thanks Pedro…good point BUY I am trying to figure out IF the TIP Bond Falls…that means Deflation ?

       ie they are worth less so the inflation premium is dropping …ergo…deflation ?

       • Steins1 says:

         November 2, 2018 - 7:40 pm at 7:40 pm

         It kind of sounds like a triple negative?
         (If TIPS are going up?) “investors are protected against deflation.”
         If it’s going down, you aren’t protected from deflation because things are inflating?

         • Fullgoldcrown says:

           November 2, 2018 - 7:43 pm at 7:43 pm

           Clear as mud.

           I am going to assume the price of TIPS goes up if Inflation expectations rise and down if inflation cools or starts trending towards deflation.

3. Northstar says:

   November 2, 2018 - 8:08 pm at 8:08 pm

   Maybe put this chart and a chart showing the rate of inflation together and see how close the correlation is.

4. Electrum says:

   November 3, 2018 - 9:39 am at 9:39 am

   tips,by definition are an inflation hedge
   tips rise with inflation expectation and fall with recession expectation
   thats the rule of thumb.
   than there is the differential between inflation and interest rates to consider
   for if inflation is rising faster that interest rates its better to hold tips

   right now it might be that as a forward looking instrument
   tips are signalling recession for next year

   thats my two cents

   • Fullgoldcrown says:

     November 3, 2018 - 9:55 am at 9:55 am

     Thanks Electrum. That’s the best response to my question yet

     • Highroller says:

       November 3, 2018 - 1:27 pm at 1:27 pm

       gov’t messes with cpi as they fudge stuff and remove variables to suit their desires. John Williams at shadow stats clearly follows and explains. If it showed the real rate as it was say 20 yrs ago then it would be much higher but they remove items tracked to fudge it lower to then make pensions payable based upon it less as the gov’t has other uses (waste) for our monies. Prices continually go up for everything and doubt that they include gov’t service fees as hidden taxes as an additional cost factor to this witchcraft index.

       http://www.shadowstats.com/

       • Highroller says:

         November 3, 2018 - 1:57 pm at 1:57 pm

         http://www.shadowstats.com/alternate_data/inflation-charts

5. silver fox says:

   November 3, 2018 - 2:46 pm at 2:46 pm

   From a google search…
   Treasury Inflation-Protected Securities, or TIPS, provide protection against inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index. When a TIPS matures, you are paid the adjusted principal or original principal, whichever is greater.

6. Electrum says:

   November 3, 2018 - 3:22 pm at 3:22 pm

   ANY VETERAN GOLD BUG THAT HAS FOLLOWED JIM SINCLAIR KNOWS SHADOWSTAT.
   LETS REMEMBER THAT ONE OF THE MAIN CLAIMS OF THE GOLD BUGS FROM THE AUSTRIAN SCHOOL OF ECONOMICS VARIETY, IS THAT MONEY PRINTING AND EXPANDING THE MONEY SUPPLY,WILL LEAD TO
   INFLATION,AND EVEN HYPER INFLATION (CPI INFLATION,SINCE THERE ARE FEW KINDS)
   THIS DID NOT CAME TO PASS AND ONE OF THE CLAIMS HAS BEEN THAT CPI IS BEING MANIPULATED.

   THIS WAS I BELIEVE ONE OF GOLD BUGISM GREAT MISTAKES

   THE REASONS FOR THE “MISSING INFLATION” MIGHT HAVE BEEN DEFLATIONARY FORCES AT WORK/

   OVER CAPACITY(CHINA),INTERNET SHOPPING,LIMITS TO GROWTH

   INFLATION DID HAPPEN WHERE THE NEW MONEY WENT INTO-HOUSING AND FINANCIAL ASSETS

   • Fullgoldcrown says:

     November 3, 2018 - 5:19 pm at 5:19 pm

     Agree Electrum.

     My interest in this TIP etf is to know if it tracks “inflation” CPI variety…as flawed as it is.

     If there is deflation in the near future this TIP chart will show it comming….This breakdown look slike its from a Legitimate medium term top.

     Deflation means the fed could be done raising sooner than later….which as Jordan points out should lead to a new Gold Rally

     Question is how far this chart drops before the Fed says “done”