Tuesday, March 27, 2012

"I'll Just Hold Until Maturity....."

As we suggest that municipal bond owners check their premise against the backdrop of reality, no one seems to comprehend what we are saying.  We must resort to a pictorial sketch of the severe principal reduction they are about to experience.  Look at the bright side, they will have 10 more years of 3% coupon payments to help them survive 10% per annum price inflation.  Those coupon payments will make them feel smarter than the ignorant gold bugs who receive no dividends.  The gold bugs will be jealous of the bondholder's unrealized 40% losses.  Goldies will actually have to pay taxes if they sell their appreciating bullion and mining shares.

Maybe those blindly pouring money into the "safest" investment, bonds, are the smart ones?  

1 comment:

Romocop said...

"I'll just hold until default."