Clipping coupons, eating feline pate', buying diapers

Every so often you run across the phrase "clipping coupons" as in "His widow lived out her remaining years clipping coupons." I've known what the phrase meant; but until today I've never seen a picture of an actual bond with coupons to be clipped.

Here's a picture of a ten year One Million dollar U.S. Treasury bearer bond with some of the coupons still on it. As each interest coupon comes due it becomes just like cash since anyone can take it to a Federal Reserve Bank to redeem it for cash. Then at the end of the term the owner (or anyone who has the bond) can return it to the treasury for the million bucks that the bond itself is worth.

It's called a "bearer bond" because the treasury will pay out the interest and the principal to whoever comes in bearing the coupons and the bond when they're mature.

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYPhrEVoUFhuuCAmL2rVtv6aQ5XxF3-lQ4u6bJFwAGeHSWS3ye_uqlbor83zrafS70SvXcVIw5KetjWd8RdZ5t0G51oAZo6G_QyXHPuzbwdO63_u2BsRHAI9JzFHshKWb4phPbpnY7zns/s1600-h/bond1small.jpg

On a related note, yesterday I had reason to check out the rate of inflation over the past thirty years and also over a variety of prior thirty years periods. Inflation ran at a 4.4% rate from 1975 to 2005. There is a useful mental tool called the Rule of 72. If you divide the interest rate into 72 the answer tells you how fast money doubles if invested at a certain percentage interest rate or how fast its value is cut in half at a certain inflation rate. The Rule of 72 says a dollar lost approximately half of its value every 16 years from 1975 to 2005. A 1975 dollar is worth a bit less than 25 cents in real purchasing power today since it's been 34 years since then. Put another way, if your house was worth $50,000 in 1975 and it's worth $200,000 today its real value hasn't changed.

The worst thirty year period in the recent past for inflation was the period from 1965 to 1995 when inflation ran at an average rate of 5.4%. During that period a dollar lost half of its value every 13.3 years. It's purchasing power was reduced by 75% in about 27 years during that time period.

I think what's been happening down in Washington is setting the country up for an inflation rate even higher than the 5.4% average rate that prevailed from 1965 to 1995.

If I'm right that means a lunchtime can of catfood that costs an old lady $2 today will cost her daughter more than $8 twenty six years years from now in 2035, perhaps much more, and it will cost her granddaughter $32 in 2051. The same thing goes for Depends, Fixodent, Prunes and all the other necessities of old age.

Just so you know, I found the inflation rates I used at the site link below. Other sites give different and somewhat lower inflati0on rates. I was looking for a worst case estimate, so I purposely looked for the inflation calculator that showed the worst picture of what's happened on the inflation front over the last 100 years.
http://www.measuringworth.com/inflation/?redirurl=calculators/inflation/