Clearly the United States is on an unsustainable debt trajectory with deficits and debt growing every year. Interest rates have nowhere to go but sideways or higher. It seems likely the United States will never be able to pay off it's debts. Also, the worldwide debt load is staggering as well when you add sovereign and corporate debt.
What's going to happen in the next recession? The likely scenario seems to involve a lot of defaults both sovereign and corporate. The United States is considered the safest paper on the planet because the Fed can print money to pay off the debt. Of course that comes with consequences like a weakening dollar and higher inflation theoretically.
What do you think? Do you foresee a coming debt apocalypse within the next 5-10 years? If so, how do you allocate your money in such a scenario to prepare. I have a rather large portfolio of stocks and bonds and right now it is approximately 60/30/10 other. What would be a good allocation to partially hedge for a potential debt apocalypse? I wish to stay fully invested at all times except no more than 10%-20% cash. Most people say to move to bonds in a recession but if people are defaulting left and right I don't think that's the place to be. And if the FED starts printing money than inflation will kill returns. Of course stocks will get killed in a nightmare scenario. Is gold the answer? To be honest, I hate gold and gold bugs but this sort of chaos seems to be what gold is good for.
Of course, I may be wrong and the world marches happily on. In this case, I'd still like to have some stocks and bonds. What is the best allocation to preserve wealth in a worst case scenario?
Submitted February 11, 2019 at 10:29PM by mr_robot77 http://bit.ly/2GDwLzT
