Gyroscopic Investing

I am a new member. Forgive me if I am rehashing old ground.

As I consider jumping into the PP pool, I worry that fed zirp policy really plays havoc with the bond portion of the PP quadrad...essentially fatally corrupting the scheme. Your thoughts.....

And while I am at it with newbie questions:

1) Though a US citizen, to hedge what I believe is bad fiscal policy of the United States, I am considering utilizing a group of foreign PP economies in nations that rank well on Heritage's list of most free economies (Australia, Singapore, Switzerland, Canada, Chile, New Zealand, and Hong Kong to be specific). Is this unwise? Should I limit myself to my native currency and economy, the U.S.?

2) Folioinvesting has an awesome platform for PP execution with single button rebalanceing, clear intuitive screens, etc.  Unfortunately they do not offer many of the foreign holdings such as bonds that I desire. Is there a trading platform which lends itself to easy PP use? Anybody use interactive brokers?

I share your concerns about Fed policy, but I think overinvesting in foreign economies leaves us wide open to currency fluctuations, which can be very harmful.

Presently I have about 30% of my VP stock portion in foreign equities, but I am thinking of cutting back on this to 20% for the reason listed above.

Unless you are planning to eventually retire in another country, I think the best we can do is to place hope in Winston Churchill's comment (IIRC) that "the U.S. can always be relied upon to do the right thing, as soon as all the alternatives have been exhausted." 

Our monetary system, including a fed that uses the treasury market as an interest rate control mechanism, is the reason for our using the PP in the first place.  If the fed behaved the way Austrians wanted it to, (short of not existing), we'd probably not be using the PP, as we would be horribly un diversified in the bond market assuming treasury bonds hold default risk.

The only way the fed could break the PP is if it could convince us that the treasury bears nominal default risk, and it won't put a floor under the bond market for the sake of the monetary system.

Well that's not the only way, but this stuff is par for the course.  The fed is actively trying to keep interest rates low during a balance sheet recession with 7% unemployment, underemployment galore, and 2% inflation. They've hit a floor of interest rates on short debt that has limited the effectiveness of additional "monetization."