3 September 2011

Safest Asset in the World?

The well-known economist Robert Shiller claims that his number one investment recommendation would be inflation-protected treasury securities (TIPS as they are usually called in the US). We beg to differ as he implies that there is no risk of government meddling with inflation statistics - or worse, the wholesale repudiation of the promise to link interest payment and principal to the value of the currency. In light of recent econonmic developments in many major economies we suggest that blind trust in the honesty of politicians is untimely.