With the continued bloating of the national debt, talk of another bailout bill/stimulus package, a new administration coming in with many promised new programs, my fear is that the US could cease to be able to meet its debt obligations and go bankrupt in the next decade.
Any thoughts on an investment portfolio designed to protect yourself in case such an event happens?
I think you need to define "cease to be able to meet its debt obligations". Do you mean:
1) We'd have to raise taxes or reduce benefits to balance SS and Medicare?
2) The US would just say "your treasury securities are worthless"?
3) The US would print money so it can pay off the treasuries with greenbacks (okay, new colors may not be green)?
My guess is that (1) has very little impact except for looking for tax efficient investments (hard to predict since tax laws would be changing).
(2) isn't going to happen, since (3) is a better choice for the gov't.
(3) is the way it would probably play out. For mild inflation it's the same old prescription - real assets, real estate, TIPS, stocks that would just ride the inflation escalator (e.g. food stores). For hyper-inflation it's real assets, historically gold has been good.
What I read tells me that our current troubles are creating problems all over the globe, so I'd expect some sort of world-wide recession/depression if the US got into hyper-inflation. Maybe I'd take the chance that some other currencies will hold up better than the dollar and diversify into some of them.
In spite of trying to think seriously about this, I think "mild inflation" is the likely scenario.