Yeah I guess failed might be a big word here. Though in my eyes what it shows is that the patience of the long term investor is getting thin. Right now as I see it there is a discrepancy between the short and the long part of the curve. I know for myself I have kept dollars for ages, but now I am shifting them. The US government is as delusional as the Greek government.
That's a different issue and I don't disagree... There's all sorts of arguments to be made for why long-dated yields are likely to rise a lot in the future. Whether it happens gradually or through auction failures, I don't know. However, one thing for sure, last week's auction certainly was not a failure and so far doesn't spell doom for good ol' U.S. of A. (btw, the current 30s are trading at 4.67% at the mom).
Well, obviously you expatriate your capital (and preferably yourself) long before inflation & government oppression reaches Chavez/Mugabe levels. Property rights will stay in place long enough to get paid on your bets, just convert them to foreign currency or physical assets as you bank coin. Property rights are surprisingly stable for most things - no socialist government cares if one speculator profits from another, only if a speculator profits from the "general public" or (especially) from the government. There are dozens of inflationary spirals in history, just read up on a few of them and you can see what to do, and how the governments act each time (pretty much the same playbook for all of them). The key is to get the bulk of your capital out before capital controls come in. After that, keep all your local wealth in real assets which are not obvious targets of "clampdowns on speculation", such as real estate, farmland etc. Do not own retail/consumer businesses which are obvious targets for price controls, or importers. If you have to smuggle out capital, do it in drips and drabs with non-obvious stuff like gemstones, using couriers, Hawala banking etc. The simplest solution is just to emigrate. Unless you are very patriotic and willing to probably die or be in jail for 20+ years as a dissident fighting an entire evil political system (kudos if you do that), you are much better off just avoiding a disaster zone such as a hyperinflationary spiral, rather than trying to preserve and increase your wealth in the midst of one; much as you would be better off leaving a war zone rather than trying to figure out how best to survive one.
Agree with GoC... Definitely own real assets like arable land, if you have to. Also, as I have mentioned before, with a diversified portfolio of land (preferably with a couple of fallout shelters), guns/ammo and canned food, you can't go wrong. One thing for certain, owning a bunch of outstrike options isn't gonna help much in a proper SHTF scenario.
This guy experienced the Argentine debt crisis first hand and wrote this book. Very interesting stuff on how life moves on, how the wealthy get the hell out of dodge first, how it's not too smart to live in a cabin without a strong support group... etc.. website w/ book advertised: http://ferfal.blogspot.com/
That was my thoughts, that AT VERY LEAST you would want the underlying, but even thats just another piece of paper with possibly less counterparty risk.
Thanks for the link. I was there too actually as an exchange student. I remember people trying like hell to buy land, etc but not being able because either the owner wasnt selling or they were foolishly trying to get a loan in that environment. And dollars got you a 20% discount in retail stores. "I have a foreign bank account" was the best pick up line ever...