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Investing During the Sovereign Debt Crisis

Back in December I wrote about what I called The Big Bubble and asked the question: What should an investor do to survive the looming government debt bubble?   Now along comes a book that attempts to answer that question.  Investing in the Age of Sovereign Defaults by Peter Treadway addresses that question.  He hedges a little about the timing and gives a range of options but the example that stuck with me was that during the hyperinflation of the 1920’s in Germany the place to be was export oriented Blue Chip Stocks.

Good Advise for this next inflation?

Who knows?  But at least people are thinking about it.

Here is the review I wrote of the book on Amazon:

Best Available

Many of us in the investing class have sensed that the ever increasing sovereign debt of the developed democracies is not sustainable. Now along comes a book that purports to tell us the best way of Investing in the Age of Sovereign Defaults. It starts strong with a clear description of the current situation and its implications and then it hedges. Treadway defines and predicts massive defaults by governments but doesn’t know when. He doesn’t seem able to explain how the current situation of a deflationary contraction and its reaction of central banks monetary easing will morph at some unspecified future date into runaway inflation.

And then the book finishes strong. Based on the history of sovereign defaults from the first section Treadway makes actual recommendations about where investors should have their money when the inflation starts. Hint it is not gold.

This is an imperfect book and it really doesn’t live up to its titles claims but, and this is a big but, it is the best book on the current financial situation and what to do about it that I have found. Treadway is on the investors side and some of his comments about minorities, unions and democracy can sound extremely harsh. He also makes some very pithy and solid observations that make the book very readable and thought provoking.

A few quotes: “ It is the will of the people that their governments overborrow. Democracy more than any other form of government expresses the will of the people.”

The history of fiat paper money is one of descent into worthlessness.”

The same voters who vote for politicians to expand their benefits do their best to avoid paying for them.”

 

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