Most folks welcomed the arrival of the Treasury Department’s inflation-linked securities, known as Treasury Inflation Protected Securities, or TIPS. For the grammatically-anal among you–card-carrying member, myself–you buy TIPS and you buy aTIPS; it’s not plural or singular, just what they are. You can click on over to TreasuryDirect, via this link, to see learn how TIPS work (using it as a plural sounds so much better, sort of like a futures contract does).
Some Trilateral Commission/conspiracy types, however, were skeptical since it left the fox guarding the hen house. The principal amount of a TIPS is adjusted each month for the change in [__]flation–”in” or “de,” and the interest payment goes up or down, accordingly. The Consumer Price Index for all items–doesn’t exclude energy and food prices–is used for the inflation adjustment. So Uncle Sam calculates the factor that determines the interest payment and the maturity value of the security, and it’s on the hook for the potential increase. Suffice it to say, for the cynic there’s plenty of reason for the government to prefer deflation as it relates to TIPS.
Never happen, right? ‘Government’s wouldn’t do that, would they.
You’ll have to decide that for yourself, but the following might help.