Monday , 24 October 2016

Major Market Gurus See Devastating Collapse of Global Bond Bubble Soon

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.

Have your say on the subject via:

We’d like to know what you have to say.

Related Articles from the Vault:

1. Bonds Getting Slaughtered, Interest Rates to Rise Dramatically, Economic Bubbles to Implode

What does it look like when a 30 year bull market ends abruptly? What happens when bond yields start doing things that they haven’t done in 50 years? If your answer to those questions involves the word “slaughter”, you are probably on the right track. Right now, bonds are being absolutely slaughtered, and this is only just the beginning. So why should the average American care about this? Read More »

2. Take a LOOK: U.S. Gov’t Debt Tracking of Rodrigue’s “Bubble Model” Suggests Treasury Bonds Could Be the Short of the Century

The US Treasury Bond market is the longest unbroken bull market known to the financial world [thanks in large part to the Fed who is] buying up every penny of newly issued government debt. [In doing so] this issuance of debt is following the exact path of the Jean-Paul Rodrigue’ “bubble model”. Words: 290; Charts: 4; Tables 1 Read More »

3. HELP! I’m Long Government Bonds!

One look at the chart below clearly illustrates that owners of Government bonds need all the help they can get right now! Read More »