J. Fredrickson

Inflation Protection Ideas

The problem with TIPS is the government provided inflation data has been manipulated to the point where it will always underestimate true inflation. So, if true inflation is at 8% and the government says it is at 3%, the TIPS really don't provide protection from the real inflation, the government doesn't have to pay out as much because of the bias number and the general public believes that inflation is tame while seeing their earnings taxed a second time. I am cautious of TIPS for this reason.