ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, September 26, 1996 TAG: 9609260075
SECTION: NATIONAL/INTERNATIONAL PAGE: A-4 EDITION: METRO
DATELINE: CORAOPOLIS, PA.
SOURCE: Knight-Ridder/Tribune
President Clinton announced the creation of a new government bond Wednesday that will guarantee investors an annual profit regardless of rising consumer prices.
Designed for investors wary of the stock market and satisfied with a modest but certain return, the Inflation Protection Bond will encourage a spendthrift society to put more money into savings, the Clinton administration hopes.
The 10-year, anti-inflation bonds will go on sale Jan. 15 in minimum denominations of $1,000, although the government expects investment houses and mutual funds to offer chances to purchase the bonds in smaller amounts.
Clinton said the government also intends to offer similar savings bonds in denominations as low as $50 starting in January 1998. He said people are likely to be able to buy them through payroll savings plans.
To encourage savings and increase educational incentives, Clinton also said he will seek legislation expanding options in spending the proceeds of savings bonds without paying taxes on the profits.
A government bond pegged to the rate of inflation is an idea in existence since at least the 19th century. The idea has been discussed in this country for decades. Britain has sold such bonds for 15 years, Canada for five.
LENGTH: Short : 33 linesby CNB