I sort of agree with the article in its conclusion but not in it's pessimistic outlook. I just don't think bonds have ever been a great inflation hedge, there just aren't that many (government) bonds you could have purchased and seen much of a real return. Plus, if inflation is going up the tradition is to lower rates, making your bonds less valuable.
TIPS _are_ an alright inflation hedge but I don't think they'll last that long at higher levels of inflation, if we had to pick between social security COLAs and issuing more TIPS I think we'd pick social security (as we should).
I just don't think America's debt is at all unsustainable, all the high levels mean is that interest rate changes have a bigger effect on incomes. In fact I think the high level of debt supports having a wealthy society in the first place, particularly one where people fund their retirements through private means. Government debt is largely determined _by private desire for savings_ since the alternative to a particular dollar being savings at the end of the year is for it to be tax revenue.
Stocks make a surprisingly good inflation hedge. Profit share tends to be fairly constant, even if there's inflation.
TIPS _are_ an alright inflation hedge but I don't think they'll last that long at higher levels of inflation, if we had to pick between social security COLAs and issuing more TIPS I think we'd pick social security (as we should).
I just don't think America's debt is at all unsustainable, all the high levels mean is that interest rate changes have a bigger effect on incomes. In fact I think the high level of debt supports having a wealthy society in the first place, particularly one where people fund their retirements through private means. Government debt is largely determined _by private desire for savings_ since the alternative to a particular dollar being savings at the end of the year is for it to be tax revenue.
Stocks make a surprisingly good inflation hedge. Profit share tends to be fairly constant, even if there's inflation.
Statistics: Posted by barcharcraz — Fri Oct 24, 2025 8:32 pm — Replies 115 — Views 12770