Inflation-Protected Bonds a Smart Move
Treasury Secretary Rubin’s proposal to issue bonds adjusted for inflation met with a generally negative press, including your Tom Petruno (“Will ‘Inflation-Protected’ Bonds Be a Good Buy?” May 17), and I wonder why. They have been a success in Canada. If they work for our Treasury, commercial bonds will surely follow. The bond market is a stumbling block to any sort of progressive growth. “Fear of inflation” is cited whenever employment rates climb, or the economy “heats up,” as if prosperity was a bad thing. And when bonds tank, stocks usually do too, apparently on the assumption that people will dump stocks when long-term bonds climb from 6% to 7%. The press should have responded with a “Now, this is interesting; let us wait and see.”
MERWIN LUCAS
Glendale
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