Last week, with the advent of inflation-indexed bonds, it suddenly looked a lot less foolish.

But it will be interesting to see if individual investor demand for inflation-indexed bonds does rise at next week's auction.

Heading into the Treasury's $8 billion auction of inflation-indexed bonds, traders considered the issue attractive.

The prices people were willing to pay for inflation-indexed bonds would show how fearful they were of inflation, he said.

In Britain, such inflation-indexed bonds represent about 15 percent of the Government bond market.

"From a year ago to today, it just makes inflation-indexed bonds more attractive," he said.

The Treasury should continue selling its inflation-indexed bonds for at least another five years, a top official said last week.

Soon, too, there may be companies issuing their own inflation-indexed bonds.

It will also reduce the issuance of its 30-year inflation-indexed bond.

These assumptions may be reasonable in view of the market returns available on inflation-indexed bonds, after expenses and any tax.