Because I do not believe that a 2012 collapse is inevitable, and because I protect all assets with stop-limit orders and/or hedges, I am far more inclined to pursue the risk-reward associated with emerging-market bonds.
To the extent European and China uncertainties exist, I favor dollar-denominated vehicles like PowerShares Emerging Market Sovereign as well as iShares JP Morgan USD Emerging Market. If the Fed goes "all-in" on reflating/currency debasing with a shock-and-awe level QE3, look for outperformance from local currency debt funds like Market Vectors Emerging Market Local Currency.
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