This may sound a bit odd coming from a libertarian, but I think there is a good case to be made with investing in U.S. government debt.  Yes, I know that the government is in debt to the tune of $21 trillion, and the unfunded liabilities are likely hundreds of trillions of dollars. I know that the Federal Reserve will resume its digital money printing as soon as the next major economic downturn comes.

I am an advocate of a permanent portfolio, which recommends putting approximately 25% into long-term government bonds.  However, there is a case to be made to invest in Treasuries even outside of the permanent portfolio, or to invest in short-term Treasuries with part of your cash portion (which is also 25% in the permanent portfolio).

This recent article says that buying Treasuries can yield up to 30 times more than your average bank savings account.  I can personally vouch for this, as my bank pays a tiny fraction of one percent, even if you have significant savings.

Using the TreasuryDirect website, you can purchase Treasury securities through your bank account.  I haven’t personally used it (yet), but I have heard from others that it is surprisingly easy.  Since short-term yields have gone up (from near zero), at least for U.S. government debt, you can even buy, let’s say, 4-week Treasury bills and just keep rolling them over until you are ready to stop.

In the context of a permanent portfolio, you can buy these short-term Treasuries with part of your cash portion.

Just as an example, let’s say that you have $100,000 in investable assets that you put in a permanent portfolio type setup.  You buy $25,000 in stocks, $25,000 in long-term bonds, and $25,000 in gold or gold-related assets.

For your cash portion, you also have $25,000.  But instead of putting it all in a checking account, or savings account, or money market fund, you can use a portion of it to buy short-term Treasuries.  As long as you know you don’t need the cash imminently, you could take $15,000 or $20,000 and buy 4-week Treasuries, or something similar.  I would still recommend leaving $5,000 to $10,000 in your checking/ savings account for emergencies or unforeseen opportunities.

You have to consider your own personal circumstances, but I just want people to be aware of this option.  Banks are paying close to nothing on savings, so you may as well take advantage of the government’s willingness to pay you something, even if it is relatively low by historical standards.

While dollar depreciation is always a threat, that is why you should own some gold.  It is also good to have some cash, and it is better to have it earning a little something as compared to virtually nothing.

At least for right now, there is nothing safer in terms of investments than U.S. Treasury securities.  You can be confident that you will get back your money, at least in nominal terms.