Title: Is The Bond Market In A Bubble? | Seeking Alpha
Headings: Is The Bond Market In A Bubble?
Is The Bond Market In A Bubble?
Summary
Bond Bubble? What Bond Bubble?
The Forces of Deflation are Real
Is There Any Value in Bonds at These Levels?
Why I Believe Everyone Should Own Some Bonds
EB Investor

Content: The US is not decoupled from the rest of the world, as many who believe rates will rise in coming quarters have contended. Recently we saw UK inflation come in at 0.5% YoY, below forecasts. We see deflationary pressures raging in Japan and across the Euro Zone. The commodities complex continues its decline, a deflationary indicator, and the dollar continues to rise on the back of foreign currency weakness. The purposeful devaluation of the Yen in Japan has caused equity prices to rally as Japanese Prime Minister Shinzō Abe's economic policies have been put into effect. However, Japan's recent tax hike has caused serious challenges to economic growth, as we saw last year with a -6.8% GDP print in the second quarter. Weakness in velocity in Europe, Japan, and the US continues to put downward pressure on inflation, a condition that will likely continue, putting our own central bank on hold, as the markets question when the first rise in rates will be. Is There Any Value in Bonds at These Levels? Many have made the argument that there is little value in the US treasury market and investors would do much better in the stock market with high dividend yielding stocks. While this argument may seem to make sense, there are two fundamental differences that make this argument specious at best.