The Debt Crisis: If Treasury Bonds Aren't Safe, What Is?

How can you lower your portfolio's risk in a world of rolling government-debt crises? Start by taking a deep breath. Then, see if you need to do some tinkering—but not too much.

With Europe in turmoil, investors are so eager for a "safe haven" that this week they were willing to accept a return of only 0.01% a month to hold Treasury bills. Such yields on short-term Treasurys are barely a sliver above their all-time lows, even as Uncle Sam's own debts may be teetering on the brink of default.

Fears are rampant that the U.S. may lose its triple-A credit rating, that the economy will stay stagnant, that inflation will eventually surge and that the dollar will wither. Lately, U.S. Treasurys and the dollar have rallied mainly because other nations are in even more of a mess.

Amid such uncertainty, you can't reduce one set of risks without raising others. If, for instance, you buy gold, you lower the risk that a collapsing dollar will crush your wealth. But you incur other hazards by paying all-time-high prices for an asset that generates no investment income, lacks intrinsic value and has a weak record of combating inflation. Other hedges carry other risks and trade-offs.

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Blah, Blah, Blah...... article uses for example .... gold..... and then advises to by foreign country stocks, bond, currencies. Still fiat and still unpredictable. Weak record of combating inflation ??????, lacks intrinsic value (like a deriviative has a lot of that going for it). No investment income, but has returned nearly 20 % a year for ten years straight. No this masterpiece is served up by the man to brainwash the pea-brained.