Hal wrote: ↑Tue Apr 30, 2019 10:35 am
pmward wrote: ↑Mon Apr 29, 2019 1:59 pm
Cortopassi wrote: ↑Mon Apr 29, 2019 1:24 pm
Meaning as you go down the list, demand is higher? Why on earth, for example, would Spain's bonds be more attractive than US bonds?
Demand is only 1/2 of the equation. The EU is in a strange situation where it is easy on the monetary side and pursing austerity on the fiscal side. That’s the crux of the issue right there.
Surprising the commentary you can find.
This is an article from a person who helped get me started on the PP about a decade ago.
His position is that Government Bonds "are not" risk free assets
Have a read of his PP article. Will be interested in peoples opinions.
Especially if they happen to live in the "more risky" countries !
https://www.caseyresearch.com/articles/ ... om-awaits/
PS: The reason I am interested in this topic is that I need to be convinced the PP is the best method "for the money you cannot afford to lose"
before another crisis. Especially since I don't live in the US
For those curious in what's happening down under.
https://www.macrobusiness.com.au
For fun look at some of the reader comments on the free articles.
I do agree that government bonds are not "risk free", but provided the country prints its own money and it's debt is all denominated in it's own currency then the only real risks are inflation and interest rate risk (which pretty much go together). And if you're holding gold you are hedged against that scenario. I'm not sure about his recommendations in the article to swap gold for real estate, crypos, and art... I think gold is still a better asset for an inflation. There may be a point where cryptos (or other future incarnation of digital currency) may become the defacto inflation hedge, but until they've been proven I would rather personally stick to the tried and true hedge the that is gold.
I also don't think underweighting bonds to overweight these real assets is a good choice, this seems especially poor advice considering that the world as a whole is still facing a lot of deflationary headwinds. And from what I understand it sounds like down under you guys are potentially beginning a deleveraging, which is the exact scenario that government bonds perform the BEST. Look at how well government bonds performed in the U.S. in 2008 when our real estate market went bust... they were the saving grace of the PP.
Until there is a prolonged period of time that stocks, gold, and bonds all lose value in unison, I see no reason to doubt the PP. As of the moment, there has been no period in any country that I am aware of that this has happened for more than a year or two, and even in those few cases (1981 and 2018 in the U.S. for instance) the losses have been manageable and have quickly recovered. Those cases have also always come in periods of tight money, which is exactly the opposite of what happens in a deleveraging. I would personally just hold the PP and not worry for the sake of worrying.
