Bearly Bullish Episode 003: Bearly Bullish Takes on Bonds - 10/31/2022

2 years ago
26

Today we do a deep dive on the current conditions of the bond markets in October 2022, looking at global sovereign bond markets with special consideration for the U.S. sovereign bond markets. We discuss what supports the prices of U.S. sovereign bonds and how U.S. bond trading can impact everything from your mortgage rate to your pension to your 401(k).

We also do a deep dive into the history and methods of previous U.S. bond defaults going back to the country's founding and discuss the consequences of those defaults.

We also consider some key questions:
Is is possible to hold bonds and not even know it?
What are some possible future outcomes for U.S. bond yields and valuations?
What is the relationship between the value of a bond and the yield of a bond? Is it possible to trade bonds?
Are bonds still an effective counter-balance to stocks, as they have been sometimes in the past?

We evaluate specific times where bonds have underperformed the rate of inflation, and what some of the ramifications were for bond investors during those times.

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Topics Discussed: bonds, bond default, default, 19th century, Revolutionary War, Civil War, World War 2, 1970s, stagflation, credit expansion, credit collapse, greenbacks, price controls, Federal Reserve, US Treasury, treasuries, TIPS, I-bonds, leverage, debt, current economic factors, deflation, devaluation, store of value, currency, money

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