On Safety, Krugman Series #3
July 24, 2012 § Leave a Comment
Re: Yield Stories
Pretty sure Krugman is attempting to defend US bonds as safe assets, although Krug’s whiny tone masks what he’s actually saying. But what is the definition of safety? Sure, as one Review reader pointed out, there’s lots of dough being poured into US bonds, and while real interest rates are negative for short term US bonds, hey, it’s better than losing everything you’ve got right?
Sure. But isn’t investing in assets with growth potential a better prospective? Gold and other commodities have way outpaced the market over the last ten years. Foreign stock exchanges are boasting far higher yields than Western markets. Isn’t consistent returns the goal of investing in the first place? If they are, owning US bonds is stupid. How Krugman thinks otherwise is the product of illogical thinking that minds rooted in common sense can’t follow.