Quote Originally Posted by VictorCharlie View Post
Kirk,

Do you think there is a bond bubble? If so do you think it is a "bubble bubble"?
While the economy is as depressed as it is there isn't a bubble. Once things pick up a bit rates will increase and people will scream "there was a bubble!*" but it's hard to see any kind of sustained global recovery that will give the US government serious problems selling their bonds or paying interest on their debt and they've ended the domestic budget deficit problem now so there's no upward pressure on rates from that angle anymore. Since 2008 rates have gone up when markets are feeling like things are going well. Rates have tumbled back down to historic lows when there's been bad news, and there's lots more bad news to come globally over the next few years.


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As you can see rates have been on a downward leg for a long time now. This mainly represnts the fact that there aren't many good investment opportunities for capital worldwide so all that capital is being parked in bond markets. And we're npot going to see better investment opportunities while demand in wealthy countries remains suppressed, and it'll largely remain suppressed until there's a more equitable distribution of wealth within those exconomies.