European PP - short bonds

General Discussion on the Permanent Portfolio Strategy

Moderator: Global Moderator

User avatar
Vil
Senior Member
Senior Member
Posts: 134
Joined: Wed Jan 01, 2020 10:16 am

Re: European PP - short bonds

Post by Vil » Sat Oct 17, 2020 11:55 am

Hal wrote:
Sat Oct 17, 2020 7:06 am
What would you suggest for DJ?
Well, I do not want anyone to follow blindly anything I am doing. I was standing behind my personal opinion that EU-PP might not behave as well as US-PP, given the role of USD as world reserve currency, having the relations of Gold, the ability of US Fed to decide solely on printing more money against the not-that "important" role of EUR, the EUR-inflation agnostic nature of Gold and also the complex relations between ECB and national banks when it comes to money supply in the euro zone. I mean US-PP sounds for me more .. how to put it.., let's say more predictive and what's also important for me - I can understand it better. Bulgaria is in currency board with EUR, which makes the situation even more complex...
Having said all that, I have 2 different US-PP implementations (outside my VP) - they are kept in different brokers/banks and they're approximately 1:2 in asset allocation - USD based US-PP vs EUR-hedged US-PP. For the bonds part of the USD US-PP - I am using US7, and for the EUR-hedged - using XUTE. In general - am trying to diversify between brokers (prefer ones that are banks also) and ETF providers. But again - that's just me.
D.J.
Junior Member
Junior Member
Posts: 18
Joined: Sat Mar 03, 2018 6:57 am

Re: European PP - short bonds

Post by D.J. » Sun Oct 18, 2020 2:28 am

Thanks for the discussion, guys.
Hal wrote:
Sat Oct 17, 2020 5:54 am
And you are totally correct, you are looking for a safe haven for cash, even if the return is worse than the alternative.
If this is the only reason, then there are other ways to do it, besides potentially splitting it between multiple local banks. You can sign up to multiple alternative banks where you can have regular cash (N26 is a proper bank with the 100k guarantee, and Revolut has a banking license, plus they're in different jurisdictions).

There is also Interactive Brokers that has a guarantee of $250k for cash and $500k for the account.
User avatar
Hal
Executive Member
Executive Member
Posts: 656
Joined: Tue May 03, 2011 1:50 am

Re: European PP - short bonds

Post by Hal » Sun Oct 18, 2020 6:57 am

D.J. wrote:
Sun Oct 18, 2020 2:28 am
Thanks for the discussion, guys.
Hal wrote:
Sat Oct 17, 2020 5:54 am
And you are totally correct, you are looking for a safe haven for cash, even if the return is worse than the alternative.
If this is the only reason, then there are other ways to do it, besides potentially splitting it between multiple local banks. You can sign up to multiple alternative banks where you can have regular cash (N26 is a proper bank with the 100k guarantee, and Revolut has a banking license, plus they're in different jurisdictions).

There is also Interactive Brokers that has a guarantee of $250k for cash and $500k for the account.
Thats my only reason. So if you can trust the deposit guarantee, go for it.

Here in Australia, the guarantee is activated at the "discretion" of the Government and they have ZERO reserves with which to honour the guarantee. One other trap here; the guarantee can be activated "only if " the bank fails. If they bail-in your funds, the bank doesn't fail, hence there is no guarantee (nice trick :o ). Suggest you check your European regulations closely.

Hope all goes well and thanks to Vil and Senecaa for an interesting discussion.
Aussie GoldSmithPP - 25% PMGOLD, 75% VDCO
Post Reply