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> Bonds are also the rich man's way of getting paid by governments. Unless the government, which has the power to break the agreement, breaks the agreement. T
by jacques_chester 10y ago
> Bonds are also the rich man's way of getting paid by governments.
Unless the government, which has the power to break the agreement, breaks the agreement.
The history of finance is well-woven with the thread of sovereign defaults.
- TheSpiceIsLife 10y agoWhen this happens is it true that if a person had invested in private or publicly listed companies their money would have been safer? I'm just thinking that by the time a state defaults on bonds the "rich man" may be facing a bundle of problems. How much would diversification help in those circumstances?
- bwilliams18 10y agoIf your investments are all inside the country That defaults on its debt then yeah your fucked anyway, but if you're investing in a country's debt and you have little other exposure to said country, then their defaulting on the debt is the only thing that's fucking you. Argentinas default is the best example of this problem.
- jacques_chester 10y ago> When this happens is it true that if a person had invested in private or publicly listed companies their money would have been safer? For a while during the 07-09 financial crisis, Coca-Cola bonds were priced by the market as less risky than Treasury bonds.
- marcosdumay 10y agoThey may be much safer, or they may be completely gone in any random afternoon. I guess, strictly speaking, that makes them safer.
- lmm 10y ago> When this happens is it true that if a person had invested in private or publicly listed companies their money would have been safer? Large multinational corporations are probably safer than the riskiest countries if that's what you're asking.