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 facts of economic history and the truth of the current economic data simply do not support their contention that bonds are in a bubble, or that said bubble will burst any time soon. The first objection I often hear is that there is a bubble in the bond market. To counter their objection, one only need review the history of bonds with the 10-year yield (pictured below), which indicates that the real bubble was in the 1980s, when it saw rates above 15%. The reality is that rates can stay low for a very long period of time, and likely will continue to ratchet lower towards 1% on the 10-year and 2% on the 30-year as the entire yield curve continues to flatten with global deflationary forces rising. The Forces of Deflation are Real
Deflationary pressures are picking up steam globally. 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.