Letter Re: Advice on Cashing in US Savings Bonds

While we prepare to break ground for this years garden I’m still preparing my financial stores long before my harvest comes in. There is still one question I can’t find an answer for that satisfies me. Are U.S. Savings Bonds safe? We have allot of EEs that can be cashed in but if they are safe as Bonds why not leave them. But if every thing is headed down the tubes how likely is the U.S. Government to default on this paper just like it would on another paper currency? Southern-Survivor in North Alabama

JWR Replies: As I’ve written many times, you should get out of any dollar-denominated assets. Savings Bonds are safe, but very poor performers compared to the gains in precious metals since early 2001. (FWIW, I fairly accurately called the bottom of the silver market in February, 2001. My proclamation was premature by just a few months, after what had been a 20 year bear market.)

I recommend that you cash in any Savings Bonds that have matured, immediately. Do the same for any savings bonds that will not mature for another two or more years. But you might have a few that are nearing maturity. Hang on to just those and watch the news closely. Once inflation kicks in, be ready to sell all off your remaining bonds as soon as possible, and put those funds into practical tangibles, such as:common caliber guns, common caliber ammunition, full capacity magazines, high quality tools, productive farm land, and precious metals.

It is important to buy a good balance of practical tangibles. I’ve seen far too many of my consulting clients invest too heavily in one area–usually precious metals. There is an old saying: “You can’t eat gold.”