Part of what separates emerging markets and developed markets is rule of law, protection of property rights, a well functioning capital markets. Lending you $ to a nation ruled by an emperor is investing without such protections.Imperial Russia was the largest borrower on the world capital markets. Russian government debt, structured through a variety of short-term and long-term instruments, was truly global in nature, with trading in London, Paris, Amsterdam, Vienna, Berlin, and New York.
Regardless if it has happened in US (I think not), the examples provided are
1) Collapse of an emerging market nation (don't buy emerging market bonds, in fact I don't buy their stocks either)
2) Hyperinflation - buy TIPS and you mitigate this risk potentially
If we are going to worry about developed nations such as US collapsing, why would one assume the stocks would do any better for companies domiciled in those nations ? GM and Citibank would not exist today if the US government had collapsed in our last major financial crisis. So US Treasury bonds would have been a loss but so too many US stocks.
https://papers.ssrn.com/sol3/papers.cfm ... _id=416620
Imperial Russia was not an emerging market nation.
Statistics: Posted by beyou — Sun Jan 19, 2025 7:41 pm — Replies 114 — Views 6659