Goodbye, I-Bond
The United States government used to allow its citizens to purchase a type of inflation protected bond called the I-Bond
These bonds have a base rate and an inflation rate which adjusts with inflation. Of course, the US Government has been a little slippery when calculating the inflation rate, but still it allowed ordinary people to put some money away and not have it entirely eaten away by inflation.
There's also a tax benefit with these bonds; taxes can be deferred until redemption, and they're generally exempt from state income taxes.
Back in 2000, when everyone was buying "pets.com" stock, hoping to get rich quick, savvy folks were buying the legal maximum of I-Bonds. They were paying about 7% back then.
The Government had a maximum limit a person could purchase: $60,000 per person. (You had to split it between $30,000 paper and $30,000 electronic to reach this amount). A couple could purchase $120,000 between them.
In recent years, because of the war on savings, the effective interest rate dropped to about 4%. However, because of the inflation protection, it did offer a nice hedge against inflation.
Well, you can kiss the I Bond goodbye!
In 2008, our Government lowered the maximum amount of I Bond a person could purchase in a year to $5,000!
Why? Because the government is also concerned about runaway inflation and our dollar becoming worthless. They're too busy printing money to prop up house prices, and don't care at all about people who want to save money and invest in the United States of America.
There used to be a $10,000 face-value I Bond, now only low face-value versions are available.
If you didn't think there was a War On Savings, the new I Bond rules should be enough to convince you!
Why would our Government want to discourage people from saving money? And why would they be afraid of offering inflation-protected bonds?