A Substack lets me share fun new ideas.
TIPS do adjust downward during deflation, but only to the original par “floor”. So a year or two of deflation will simply offset any preceding inflation augmentation.
A few years ago I suggested something along these lines: that the ECB hold consumption-linked perpetuities:
https://gideonmagnus.medium.com/the-case-for-consumption-linked-perpetuities-in-the-eurozone-557779ece710
You'll never have to worry about deflation in the US. Regular TIPS will work fine.
TIPS do adjust downward during deflation, but only to the original par “floor”. So a year or two of deflation will simply offset any preceding inflation augmentation.
A few years ago I suggested something along these lines: that the ECB hold consumption-linked perpetuities:
https://gideonmagnus.medium.com/the-case-for-consumption-linked-perpetuities-in-the-eurozone-557779ece710
You'll never have to worry about deflation in the US. Regular TIPS will work fine.