Inflation-index bonds and private e-currency

["E. Allen Smith" <EALLENSMITH@ocelot.Rutgers.EDU>]

	One of the attractions of privately-produced currencies is as a
hedge against inflation; this development may be a competitor to this
idea. On the other hand, this setup does have an unavailability in _time_
of the money (more so than other, equal-security bonds of the same duration),
which may offset its greater spendability.
	-Allen

>    BARRON'S Online - Market Surveillance for the Financial Elite
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>   Barron's
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>        CLINTON UNVEILING NEW GOVERNMENT BOND WITH INFLATION PROTECTION
>   __________________________________________________________________________
>      Copyright &copy 1996 Nando.net
>      Copyright &copy 1996 The Associated Press
      
>   WASHINGTON (Sep 25, 1996 11:12 a.m. EDT) -- President Clinton, in his
>   latest election-year appeal to the middle class, is unveiling details
>   of a new type of government bond that will offer investors protection
>   against inflation.
   
[...]

>   As the program was explained, the securities will protect the
>   principal against inflation, as measured by the consumer price index.
>   As an example, the official said, if inflation increases 3 percent in
>   a given year, a $1,000 bond would be adjusted upward to $1,030 at the
>   end of that year.
   
>   By offering this protection, interest rates on the bonds will be lower
>   than on regular 10-year notes that do not provide inflation
>   protection.
   
[...]

>   The notion of tying government securities to inflation has not been
>   tried in the United States, but other countries have been offering
>   such investments for some time.
   
>   Such bonds have been available in Britain since 1981 and are also
>   offered in Canada, New Zealand, Australia, Israel and Sweden.
   
>    Copyright &copy 1996 Nando.net