SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: GraceZ who wrote (51827)1/27/2006 6:28:01 PM
From: Mike Johnston  Read Replies (1) of 110194
 
I have bruises all over my body, because off attempts to short the bond market at one time or the other.
Fortunately i am still alive.

Bonds were an excellent investment in the 80's in the declining rate and inflation environment. High coupon combined with appreciation from dropping rates and declining inflation.
Now, we have totally different situation. Low coupon and rising inflation. Low rates are still very much stimulative to inflation.

Anybody holding bonds in the last couple of years, although their prices held steady, has experienced significant erosion in the purchasing power of their principal, I expect that to continue. After all, in 5 or 10 years one does not need very high levels of inflation to reduce the value of principal by 50%.
Inflation right now is higher than it should be. And what happens if we get even higher levels of inflation as i expect ? Not pretty.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News