5000 yr chart Debt bubble
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Started by bear - Nov. 16, 2018, 12:09 a.m.

https://www.google.com/search?hl=en&biw=1280&bih=1023&tbm=isch&sa=1&ei=ck_uW-_4H4Kf0gLXuongCA&q=5000+year+bond+chart&oq=5000+year+bond+chart&gs_l=img.12...13311.16565..19183...0.0..0.373.1000.7j1j0j1......0....1..gws-wiz-img.e6ggHgqOqbc#imgrc=_&spf=1542344584489

if that does not work,... google, 5000 year bond chart.

if you have not seen this chart, it is worth looking at. 

rates are at a historic low,  meaning price is at a 5000 year high recently.  but bubbles do not always just crash hard and fast.  

(remember the Japanese stock market bubble took 23 years to go from top to bottom). 

Comments
By bear - Nov. 16, 2018, 12:11 a.m.
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remember,  this reflects an overconfidence that investors have in the ability of govts to pay their debts. 

By MarkB - Nov. 16, 2018, 1:41 a.m.
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That's a lot of data to sift through. But essentially, yes. We are at the best interest rates ever.

As for the part about governments being able to pay off their debts, we've already had that experience twice with European countries not being able to pay us their war debts. Many of which have been "forgiven", and therefore absorbed into our own national debt. The "why?" on that still eludes me.

Nonetheless. There is no economic model that supports the idea that a country can borrow itself into prosperity. 

By cfdr - Nov. 16, 2018, 8:03 a.m.
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Thanks.  A lot of good thinking material.

A lot of people have money now, and money isn't worth much (unless you don't have any, of course).  Why wouldn't money be subject to the same supply and demand relationships?  But, money supply is dependent on credit/debt.  The Fed is between a rock and a hard place, isn't it?  

Isn't our system of creating money by issuing debt guaranteeing failure?


The other thing interesting that I noticed was the long term chart of 10 year treasury rates peaking in 1981.  What has been interesting to me, from a trading point of view, is comparing cash long bond prices with a roll adjusted chart of those bonds.  The roll adjusted contract shows a much more pronounced trend - the long term bias clearly shows in the adjusted contract.