How the Pandemic Created Inflation Given the current state of affairs and how the Covid-19 pandemic has impacted the global economic outlook, an unconventional recession has emerged, prompting many governments to inflate the money supply to counteract the artificially suppressed economic activity. In many countries, this inflated money supply has resulted in consumer price inflation and resulted in investors seeking a safe haven investment. When there's a high level of inflation, economic uncertainty, or financial markets are in turmoil investors flock to safe-haven assets. The rationale is that in times of crisis when most traditional investments are losing value, safe-haven assets tend … [Read more...]
What are Treasury Inflation Protected Securities (TIPS)?
As the Government continues to flood the economy with new money via QE1, QE2, Operation Twist and now Twist2, many investors are fearing a massive inflation may be just around the corner. And so they are looking for a sfe haven to protect their investments from the deluge they see coming. Therefore they are turning to Treasury Inflation Protected Securities, or "TIPS". TIPS are considered an extremely low-risk investment as they have Government backing, are protected from the ravages of inflation and are less volatile than bonds and safer than stocks. How Treasury Inflation Protected Securities (TIPS) Protect Against inflation Over time even small levels of inflation can make a big … [Read more...]
