What assets in the Permanent Portfolio protect me from bond losses if rates go up due to inflation?
Under bad inflation situations the gold allocation in the Permanent Portfolio will go up sharply in price and should offset the bond losses you’d experience. This is what happened in the 1970′s when inflation was double digits and bond holders were being badly hurt. A portfolio that held gold offset all losses in the bond allocation and actually turned a profit during that time. There are no guarantees of course, but this is what the economic forces should ultimately reflect over time.
Related Questions
- How do I protect my assets in several developing countries for risks like terrorism or civil strife, or a change in government that could deprive me of the use and force me to abandon them?
- Can a managed variable annuity protect my assets from lawsuits and seizure arising from bankruptcy and estate settlements?
- Does the increasing inflation rate warrant an increase in interest rates, too, to protect real rates of interest?
