On the topic of how countries could deal with foreign bondholders during a euro currency crisis.
It's obviously more likely that domestic bondholders will be treated "better".

Now i'm wondering how an Irish Ishares etf that holds bonds from my own country would be treated, hmz..

But that's only because of the USD-denominated assets, so just adopt a US PP. What exactly is the problem with doing that? Everybody assumes the US will be the last man standing, which probably makes that scenario less likely to happen. I would effectively make a bet on the US, and not just the USD...

AnotherSwede wrote:

[Because I don't../quote]
Me neither

what an awful problem, having that much money in these times.

I realise it's a luxury problem, but it's still a problem.

AnotherSwede wrote:I have a mortgage and have not been able to rationalize paying much more interest than I get.

So I have 75% global equity, 25% gold and try paying off the mortgage.

75% stocks? Holy shit, to each his own but to be 75% in stocks right now?

Let me put it like this for all the people who still say it's all ok and will work out. Lets just say: - you have 25 - 30 yearsalaries in euros. - you live in Europe - most of it is in cash, part of it is in a euro PP - you obviously cannot hold this in cash (especially euros!) Who here will claim w...

Ok, my currency (krona) follows the euro, pounds are worse. I am afraid euros (and bunds) are not worse off than other currencies, even if the euro breaks it must be replaced, 1 to something, by something. It remains to be seen if Germany or whatever country's bonds you hold, will convert foreign c...

AnotherSwede wrote:

Not if you can prevent that to begin with. Which you can.

How?

By not being 100% invested in euros.

If the alternative is worthless currency and equity it is. If the alternative is slowly, but not smoothly, losing nominal value, then smooth-ish 0% return is really good. Not if you can prevent that to begin with. Which you can. I am just questioning a quick and orderly return to positive yields an...

AnotherSwede wrote:25% gold and whatever could be saved of the rest.

It doesn't make any sense to hold a portfolio where you have a chance of retaining a part of your capital.

A global PP (using https://www.ishares.com/uk/individual/e ... -ucits-etf for the bonds), and using a total world ETF for stocks would have never broken down completely.

It does break the PP concept entirely though.

Looking at this, the PP would have been totally destroyed in quite a few cases. Some more evidence for geographic diversification. Certainly, a widely diversified portfolio like the Permanent Portfolio is way better in those cases than one just using stocks/bonds which is what many would recommend....

Looking at this, the PP would have been totally destroyed in quite a few cases. Some more evidence for geographic diversification.

AnotherSwede wrote:How horrible would a return to 5-10% interest rate be? What would happen to pension funds, real estate prices?

I suppose pensions would have to be fully funded by tax money.

5-10% ?
As of right now, the world's financial system would pretty much implode entirely.

Selling "cheap" euros now and buying very "expensive" dollars in 1 go right now is also a major risk, that should have been done 2 years ago. To be honest, nothing looks good for euro investors atm. That may or may not be a bad trade if the Euro goes kaput which is what all thos...

It's pretty simple. Yields can only go so far negative, at a certain point it becomes cheaper to stack piles of cash and/or use gold. So there is a floor. Efforts to prevent that, such as making cash illegal, should just make you run away like hell, and not think " well it should work because ...

This package appears to be much safer especially compared to a euro based PP. We are absolutely in unchartered waters, so we simply cannot backtest the permanent portfolio and assume it's normal behaviour will continue, especially not the euro PP. This has simply never happened before. I think you ...

I understand this immensely. But at 1% or lower long bonds provide little insurance. It would be better to greatly reduce duration as you suggest, or go to cash and look to just ride things out with the other assets. How do you figure that? The convexity will increase so that it's still capable of ...

AnotherSwede wrote:What if they continue lowering yield by .2-.3% each year? More and more negative.

Stock valuations will continue becoming more and more insane.

Cash banned, if deemed necessary, but probably not.

Then you would be totally crazy to stay invested in euro paper.

buddtholomew wrote:

dutchtraffic wrote:

MachineGhost wrote:
You're not in bonds for the yield, but capital gains.

Yes, but the lower the yield, the less potential capital gains left.

Rates can and have gone negative.
Capital gains are not capped when bonds reach zero.

Sure, It's just not very likely to see rates at -8%....

Again I am starting to think more and more about a global portfolio to try and get through this total madness. The percentage figures are pretty much pulled out of my *** so they would probably change. 10% Short term govt. bonds/cash in local currency - iShares Euro Government Bond 0-1yr UCITS ETF /...

You americans have nothing to complain still ;) The euro version of TLT (https://www.ishares.com/nl/particuliere-belegger/nl/producten/251775/ishares-ebrexx-government-germany-105yr-ucits-etf-de-fund) is yielding 0.35% ..... I am not fully invested yet and i need to invest quite a lot of euros........

"the german 20year etf is yielding 0.35%" Is the US rate higher because of expected inflation? ie the real rates for safe 1st world countries should be the same? (equilibrate) None of the bond rates make any sense right now, as they are effectively set by the government (yeah yeah..), and...

MachineGhost wrote:You must avoid stocks and invest in other Prosperity assets or the PP is effectively broken.

I'm not sure what you mean?
I'm not avoiding stocks, i have a fully normal (EU) PP.

Dutch wealth tax is pretty bad, but you can get some 5 year cd's which yield about 0.8% real, so -0.4 after tax which is not too bad I guess in this environment. Net taxes are probably slightly lower as the first 20/40k are not taxed. Eurozone 30y bonds yield less than 5y cd's so they should probab...

I might just collar some dividend stocks for a super low risk approach to capture at least some yield, untill things normalize...if they ever will. (http://www.investireoggi.it/forums/attachments/gsstockstobonds148-1-pdf.86895/) This paper describes using a collar with put spreads, though I wouldn't...