Hi Ad Orientem,Ad Orientem wrote:I don't think there is an ideal solution here. But if I were in Europe trying to do a PP I might consider going with long term Swiss Gov't bonds. The Fanc is currently pegged to the Euro and they own their own currency. Also Switzerland is in MUCH better shape than the rest of Europe debt wise.Arturo wrote:you pointed out the core of Europe problem, and the biggest fear for an european PP investor. country bonds are not backed up by BCE.Ad Orientem wrote: One major issue with a Euro zone PP is that government bonds are not backed by the printing press. This adds a level of risk that doesn't exist in the US Japan or the UK. I am not sure how to compensate for that.
So from this perspective, you really do not know if you should buy only long german bonds, because is the strongest economy in Europe, or you should buy a basket of weighted countries to invest in a diversified product.
Its not about how EU-PP performed until now, but how it could performed in the uncertain future under conditions that are different than the ones Harry Browne used to design Permanent Portfolio.
But there are risks there too. What is pegged today can be unpegged tomorrow. Still I would say they are probably the safest bonds in Europe at the moment.
its a little bit confusing. Some says german bonds. others a basket of weighted countries. You, Switzerland. The issue here is that nobody knows the future and whats going to happen with those countries, so trying to figure out how those bonds will perform is just a matter of speculation, and not investing.
How happened that i am living in the worst country for PP? :-)