Expert: Doug Ingram - 3/17/2011

Question
Hi,

I have quite a few EE and I bonds.  Recent reports indicate that if the dollar crashes, US treasuries would be worthless and to get rid of them.  Are these bonds the same as US treasuries?

Answer
Those sound like some pretty wild reports, although we are printing too many dollars and spending is out of control.
Those are also Treasury issues - and as 'safe' as anything out there -  except maybe cash.
(Even cash might have limitations in the doomsday scenarios.)

The Euro and Yen have their own problems.

Remember, the US can make good by printing all the currency it wants to (in order to make payments), so default risk is low.
Even if we do have some inflation - even a lot - there's very little evidence the dollar and/or Treasuries would be "worthless", even if they did lose some purchasing power.
If you have some 'I Bonds', they are also protecting somewhat from the inflation/runaway-inflation scenario.
These kind of reports have been out there since the late '70s, so take that into account.

Also - answering this question also requires my 'opinion', so the response should be considered in that light.