Porterian

This is my personal blog. Travel, financial and political observations. Notes to myself and my friends. Content development for my monthly newsletter, Porter Stansberry's Investment Advisory (www.stansberryresearch.com).

Friday, April 07, 2006

THE TOP OF THE BOND

Last week (on April 1st) in The Wall Street Journal, Edward Chancellor suggested the U.S. sell undated zero-coupon bonds.

“How about issuing an undated zero-coupon bond? Such a bond would have several attractions. Since it pays no interest and never redeems, it would save the Federal government a packet. It would also satisfy the apparent willingness of global investors to snap up low-yield, risky paper. Last, but not least, an undated zero-coupon security would be the ultimate expression of U.S. financial hegemony.”

I’ve tried repeatedly to contact both Edward and his editors to verify that this suggestion was not an April Fool’s day gag. If it was, WSJ was unaware that it was publishing humor.

That it’s even possible to posit as a joke that the U.S. government could sell a bond that will never be repaid and that carries no coupon tells me the top is in.

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