But, we are only talking about US treasury bonds here, so in the example the ability of that government to repay is going to be static. The only difference we are talking about here is changing inflation numbers for the same entity. My argument is simply this, rates must increase parallel with inflation, or demand for those bonds will go down, which in turn will drive those same rates back up. The rate is for TIPS is just the standard CPI which is used for virtually all government processes and budgets. The point of that part was it being considered a bad investment, which means that the government is not inflating away its debt, otherwise these securities would be better then normal securities. Maybe I should have made my point clearer on this part. I was not arguing which is more important, I was simply arguing against PeterDonis`s point that these numbers were being used by politicians to handwave part of the debt away. I was just stating that I don't think they are doing that.