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Should We Worry About a Bond Bubble?
Exclusive: Shiller says contagion from bond crash is unlikely
by Robert Shiller
Market Watch
NEW HAVEN, Conn. (Project Syndicate) — The prices of long-term government bonds have been running very high in recent years (that is, their yields have been very low).
In the United States, the 30-year Treasury bond yield reached a record low (since the Federal Reserve series began in 1972) of 2.25% on Jan. 30. The yield on the United Kingdom’s 30-year government bond fell to 2.04% on the same day. The Japanese 20-year government bond yielded just 0.87% on Jan. 20.
All of these yields have since moved slightly higher, but they remain exceptionally low. It seems puzzling — and unsustainable — that people would tie up their money for 20 or 30 years to earn little or nothing more than these central banks’ 2% target rate for annual inflation.
Continue Reading at MarketWatch.com…
Source: http://financialsurvivalnetwork.com/2015/03/should-we-worry-about-a-bond-bubble/?utm_source=rss&utm_medium=rss&utm_campaign=should-we-worry-about-a-bond-bubble
