TREASURIES - THE GIFT THAT KEEPS ON GIVING
No not a GIFT to the bond holder - Its a GIFT to the BORROWER the US Government!!!!!!!!!!!
At 2% interest with 2% inflation and 0.5 tax you are giving away 5% of you capital whenever you buy a new 10 year bond.
And yet people are still buying them all the time!!!!!
Bond need to pay 3% to compensate for inflation and tax and that is with a NIL return for the time value of money,
Add in a decent 3% return for the time value of money and 10 year bonds should be returning 6%.