China may very well diversify away from the dollar and even US Treasury bonds, but it is hard to see any major government holder of US dollars going from a 95% dollar position to a 60% position, or even a 50% or lower position anytime soon.
But a disorderly default could prove even more costly: Not only would the ECB certainly lose on its bonds, but euro-zone governments would need to recapitalize Greek banks and provide them with adequate collateral to enable them to continue to access ECB lending facilities if Greece was to remain in the euro.
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But, once again, if the economy stalls, even corporate bonds may become cheaper.
Heiner Skaliks, fund manager of the Strategic Latin America (SLATX), a balanced mutual fund, said that investors can find investment grade bonds that are even trading below par, but have substantial upside.
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When the market began to firm up but bonds kept ripping, it told us that the selling had not even hardly begun.
Inflation-linked bonds also offer protection but their current real yields are very low or even negative.
But since 1997, none of the 59 Cat bonds issued has hit its trigger, even those covering Florida hurricane damage last year, when four storms battered the peninsula in rapid succession.
But even beyond that issue, I believe that Biggio, Bagwell, Piazza, Clemens and Bonds would all deserve a place in the Hall of Fame even if we had definitive proof that they used steroids.
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Bridgewater Associates founder Dalio is on the record saying there will be a massive opportunity to short bonds when the massive bull run over the past several decades finally unravels, but even he has said the timing is not yet clear.
But many families can wring even more tax savings from a 529 by investing it all along in taxable bonds--whose interest would otherwise be taxed at a federal rate of up to 40% (including the effect of an itemized deduction clawback)--and holding index funds or individual stocks in their taxable accounts, says Yale School of Management professor Matthew Spiegel.
But they will also encourage people to shift savings from bank deposits and bonds into the stockmarket, and even to borrow money in order to buy shares.
But even if you are willing to accept a higher degree of risk, cushion your downside by including some quality bonds or bond funds in the mix.
However, it is not the forces of energy trapped in chemical bonds or even the awesome power of the atom that we are now beginning to unleash, but human potential itself.
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