There is literally nowhere for the bond market to go except down and, when this bull market turns into a bear, it will create chaos and financial devastation all over the planet.
- Warren Buffett believes “that bonds are very overvalued“,
- 80% of fund managers are convinced that bonds have become “badly overvalued“.
- Bill Gross, the most famous bond expert on the planet,, recently confessed that he has a sense that the 35 year bull market in bonds is “ending” and he admitted that he is feeling “great unrest”.
- Nobel Prize–winning economist Robert Shiller has added a new chapter to his bestselling book in which he argues that bond prices are “irrationally high”.
- Stanley Druckenmiller, George Soros, Ray Dalio, Jeremy Grantham, among others, warn investors that our 35 year investment super-cycle may be exhausted. They don’t necessarily counsel heading for the hills, or liquidating assets for cash, but they do speak to low future returns and the increasingly fat tail possibilities of a “bang” at some future date.
- Indeed, Robert Wenzel of the Economic Policy Journal, says that this coming rush for the exits will set off a “death spiral” and as this death spiral accelerates, we are going to see global interest rates rise dramatically. Considering the fact that more than 400 trillion dollars in derivatives are directly tied to interest rates, that is a very scary thing.
Savor this Bull market moment, they seem to be saying in unison. It will not come again for any of us; unrest lies ahead and low asset returns. Perhaps great unrest, if there is a bubble popping.
Where we are right now is at the end of the party. There are some that want to keep on dancing to the music for as long as possible, but most can see that things are winding down and people are starting to head for the exits.
The irrational global financial bubble that investors have been enjoying for the past few years has stretched on far longer than it should have but that is the way irrational bubbles work – they just keep going even when everyone can see that they have become absolutely absurd. However, eventually something always comes along and bursts them, and once that happens markets can crash very, very rapidly.
Original Source of above edited article is HERE.
Also read We’re in the early stages of a new bond bear market for a great write-up complete with a number of illustrative charts.
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