"governments are going to default.",
"we live in a socialist world bent on confiscating savings (at the benefit of the state) using inflation"
These are contradictory. Governments don't have to default if they inflate their debt away.
Also, money is just pieces of paper or a number in a computer. You shouldn't keep most of your savings in money. Cash is just an agreed upon number meant to help with short term transactions. It's a tool for trading. You don't have real savings until you have something more err... real, like stocks or actual stuff. Inflation can't touch that. If you feel bonds don't offer a good enough return given inflation risks just don't buy bonds! No reason to panic. The world GDP won't drop 25% unless we run out of key natural resources or face some kind of catastrophe, things that would happen regardless of "socialism".
Government debt matters but not in the way you seem to think.
> > "governments are going to default.", "we live in a socialist world bent on confiscating savings (at the benefit of the state) using inflation"
> These are contradictory. Governments don't have to default if they inflate their debt away.
The reconciling position is that inflation used this way is simply default via other means. The holders of debt will not get back what they are owed in terms of purchasing power -- a nominal repayment rather than a real repayment.
When the issuer of those securities is the one defining the amount of inflation, that issuer has every reason to understate said amount, and the holder of the securities may still lose purchasing power.
Consider e.g. Argentina's official inflation statistics versus 3rd party estimates. The difference is not explained by Argentina being a bunch of meanies but rather the system of incentives and particularly Public Choice Theory.
USA TIPS are inflation-adjusted according to a published standard (CPI-U). One can argue that the standard itself underestimates inflation (I would probably agree), but the securities really do adjust with measured inflation. If the inflation is understated, it's at least done in a defined way. So yes, I suppose the holder of the securities would still lose purchasing power, but not in a catastrophic way. TIPS are still a decent hedge against inflation.
These are contradictory. Governments don't have to default if they inflate their debt away.
Also, money is just pieces of paper or a number in a computer. You shouldn't keep most of your savings in money. Cash is just an agreed upon number meant to help with short term transactions. It's a tool for trading. You don't have real savings until you have something more err... real, like stocks or actual stuff. Inflation can't touch that. If you feel bonds don't offer a good enough return given inflation risks just don't buy bonds! No reason to panic. The world GDP won't drop 25% unless we run out of key natural resources or face some kind of catastrophe, things that would happen regardless of "socialism".
Government debt matters but not in the way you seem to think.