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Inverted Yield Curve - Another Blow To Seniors

Published Thu, 06 Dec 2018 12:59:46 -0500 on Seeking Alpha

Just when you think inflation will work in your favor, the yield curve threatens to invert.
Inflation exists for ordinary investors despite low interest rates. Low yields push income investors into higher risk investments. An inverted yield curve is negative for banks and insurers but positive for stocks with solid debt management. Conventional wisdom suggests inflation is a hidden tax because it erodes your purchasing power. In this case, conventional wisdom is accurate. For instance, according to the official U.S. inflation calculator site, a $5,000 bond purchased at par 20 years ago in 1998 would cost more than $7,700 to buy today.

The Federal Reserve is in charge of regulating bank lending rates. Theirs is a dual mandate to maintain a reasonable level of inflation and employment and in so doing, they use many metrics to determine if inflation exists. Some of their measures include food and energy, some do not. Some measure wholesale prices and some measure consumer prices.
Inflation Exists For Ordinary Investors Despite Low Interest Rates
I measure my family's personal expenses and through nearly three 20-year cycles, I know that my expenses double every 20 years. That computes to about a 3% annual inflation rate. Yet during these nearly 3 decades, interest rates on a government insured certificate of deposit have ranged from .5% to more than 20%. A brief history of CD rates can be seen here.
Cost of goods, cost of wages as well as cost of money... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
VANGUARD EXTENDED DURATION TREASURY ETF 109.16   0.0 0.00 0.00 2.99
SPDR BARCLAYS CAPITAL 1-3 MONTH T-BILL ETF  

VANGUARD EXTENDED DURATION TREASURY ETF - EDV
VANGUARD EXTENDED DURATION TREASURY ETF - EDV  


Older articles featuring Vanguard Extended Duration Treasury Etf (EDV):
What's Going On With The Yield Curve?
Yield Curve Revisited
To Fear Or Not To Fear The Yield Curve
The Inverting Treasury Yield Curve And The S&P 500
The U.S. Yield Curve Inverted. Time To Worry?
Worried About The Yield Curve Inversion?
Why Are Markets Spooked By A Flattening U.S. Treasury Yield Curve?
Is There A Signal In The Noise? Yield Curves, Economic Growth And Stock Prices
Yield Curves Near Inversion
Do Eurozone Yields Matter Anymore For Treasuries?

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