[kingkongrevenge]

> There are plenty of low-risk, low reward options out there if all you want to do is preserve your value.

No there aren't. To preserve real purchasing power monetary inflation FORCES you to speculate. Straightforward saving has been a loser's game for many decades now. This was not always true and there were long periods of price deflation and good interest rates before the establishment of the fed.

[gravitycop]

Straightforward saving has been a loser's game for many decades now.

18% interest was a loser's game? http://www.hsh.com/indices/6mocd80s.html Even as recently as 1989, CD rates were over 10%. In 2000, they were over 7%, and in 2007, they were over 5%. http://www.hsh.com/indices/6mocd00s.html

[kingkongrevenge]

Yes, and go look at annualized monthly CPI increases during those periods.

[gravitycop]

Annualized monthly CPI increases were over 18% for 6-month stretches? How about 5 years? There are 5-year CD's. From 1980 to 1985, the CPI went up only 30.6%. http://cost.jsc.nasa.gov/inflateCPI.html From 1989 to 1994, the CPI went up only 19.5%. From 2000 to 2004 (as late as that calculator goes), the CPI went up only 9.7%.

Right now, America, and the world, are experiencing deflation. Yet, 6-month CD's are paying over 2% interest.

[kingkongrevenge]

A few quarters here and there with decent real CD rates is not reflective of how people actually go about saving. You have consistently lost purchasing power if you plowed cash into savings accounts, CDs, and money markets funds.

When all factors are considered, including understated CPI figures, I believe real returns to cash in the period in the 80s you point to were not even very good. Especially when you consider the opportunity cost of your five year CD and what played out in other asset classes during that five years.

[gravitycop]

Especially when you consider the opportunity cost of your five year CD and what played out in other asset classes during that five years.

What other zero-risk asset classes were we comparing against?