Sunday, October 5, 2008

Greg Mankiw's Blog: Deflation?

Greg Mankiw's Blog: Deflation?

"...at maturity, if the adjusted principal is less than the security's original principal, you are paid the original principal.

That is, in a period of substantial inflation uncertainty (e.g., now), TIPS are an attractive bet. You get inflation protection if prices rise, but you get your full nominal principal back at maturity if prices fall.

Thank you dear magi a such machiavelli michelangeloic crafty kind attractive bet!

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