Bond Bubble Looming, where does it end?

We have been talking about this for a while (28/01/09, 11/03/09, 23/04/09), it was a popular topic on this blog in 2009 but well covered and for that reason we have not revisited it much, but the alignment of the stars warrants a look at the symptoms of the disease because now they are ever more present than before. At this point we can see a clearer path; which is still leading to a bond bust destination.

It has also becoming a mainstream topic, recently it showed up in an article titled ‘Currency, the weapon of choice in a world of lower demand‘.

If something can’t happen it won’t, and what can’t happen is a world in which we see century bonds (bonds with 100yr terms) becoming commonplace, they will probably be (as is the benefit with all hindsight) the poster-boy of the …

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Bear market in bonds?

We have been talking about this for some time, (see posts here 1, 2, 3, 4). In this clip Bloomberg editor Tom Keene talks about the issue and raises some interesting points on the matter. Debt growth has retracted rapidly and deep, it is even greater than the contraction of the 70’s (see chart in the clip). There seems to be no private demand…. Cause for concern one would think!

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