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Vanguard Intermediate-Term Bond ETF Message Board

  • crazyhorse1786 crazyhorse1786 Sep 14, 2012 12:32 PM Flag

    QE 4-ever

    QE is hurting the bond market. They are still printing money sending it down a black hole. The economy ate up QE 1 and 2 with no effect. The bankers are going to get this new money to make loans. Problem is business owners are not borrowing in this climate to expand their business. If their printing of money continues we will at sometime get inflation and bonds will be no good. I don't think we are quite there yet but if you begin to lose principal in your bond holdings, then I would sell.

    Sentiment: Hold

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    • The Feds are keeping interest rates down, which means that bonds pay very little. But BIV is mainly Treasury bonds, which will go up in price if the stock market tanks. So they are a good hedge against a market downturn, and a good place to keep your money if you don't want to buy into the stock market right now.

      It's true that bond prices are vulnerable to inflation, which is a valid long-term concern; but for the next year or so, the economy is so weak that people just aren't spending a lot of money. No matter how many bonds the Feds buy, until the so-called "velocity" (i.e., spending) of money picks up, inflation will be kept in check.

      • 2 Replies to yardbird09
      • yardbird, I agree w/ you. I still hold a lot of bonds, utilites and some consumer defensive stocks. Lately I have bought some Silver Wheaton and real estate companies, in case I am wrong and Ben Bernacke is right. The Fed will print money till it works! Have a wee bit of insurance on your side.

      • yardbird, I agree w/ you. I still hold a lot of bonds, utilitites and some consumer defensive stocks. Lately I have bought some Silver Wheaton and real estate companies, in case I am wrong and Ben Bernacke is right. The Fed will print money till it works! Have a wee bit of insurance on your side.

 
BIV
84.20+0.08(+0.10%)Aug 28 4:00 PMEDT