https://www.cnbc.com/2017/08/04/greenspan-bond-bubble-about-to-break-because-of-abnormally-low-interest-rates.html
8 Hours Ago | 01:44
Former Federal Reserve Chairman Alan Greenspan issued a bold warning Friday that the bond market is on the cusp of a collapse that also will threaten stock prices.
This essentially goes hand in hand with what I have been saying about having a SOVEREIGN DEBT crisis that will rock your world.
And that will drag the US economy right with it. As debt service levels rise the US government will have ever more trouble in meeting it's obligations. Which is likely to increase deficit spending to meet it's obligations. It is a vicious Catch 22 cycle that we have painted ourselves into.
There has been a Bull market in Bonds since interest rates started declining in the early 90's. The American interest rate environment has been kept abnormally low by an inflow of foreign capital as a flight to quality and safety. At some point debt levels will have become egregious and their will be a refutation of American debt. Interest rates will have to rise to entice buyers of that debt to subsume the risk they are taking with such a heavy American debt load.
Perception in the world plays a large part as to the desirability of American debt. With the perception that Trump will make things swell again in America,
optimism increased and people did not feel as much need for the safety of holding US Treasuries. Thus interest rates climbed from a low point on the 10 yr Treasury of 1.47% in the middle of 2016 to 2.24% today. Also economic strength in the EU coupled with the expectation of Central bank tightening is causing an out flow of capital out of US bonds. In other words they can get a better than before ROI in their own Bonds.
I am really surprised no one picked up on this today. I guess you all are too busy arguing about trivialities.