“When inflation is high, everyone buys government bonds,” Novy told Bitcoin Magazine. “They are offering about 14 percent a year. It’s a very good deal comparable to the most profitable hedge funds you can find in America.
Yes, this should satisfy a lot of people. If the government interest rate beats inflation, you have a relatively safe investment which beats inflation. There aren't too many options like this.
Are you joking? I will never buy treasury bonds issued by any of the South American nations (perhaps with the exception of Uruguay). They will offer you an interest rate of 14%, but you will never know whether you will be getting back your principal amount or not. Defaults on treasury bonds are not that uncommon in South America.
Could not agree more. As the saying goes, the higher the return the higher the risk. The returns are so high as the government needs to pay high returns in order to get anybody to give them money. The higher the returns they have to pay the higher the risk that they could default on those obligations.
There is this belief amongst many investors that anything backed by a government is safe but this is an illusion. Some governments have worse track records than your local bank when it comes to the repayment of their debt. Personally think that the days of safe investments in so far as government debt is concerned is nearing its end.