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Wong Kon How

Warns of bonds market bubble

Updated: May 6, 2021


"We are experiencing a bubble, not in stock prices but in bond prices.

“The real problem is that when the bond-market bubble collapses, long-term interest rates will rise,” Greenspan said. “We are moving into a different phase of the economy -- to a stagflation not seen since the 1970s. That is not good for asset prices.”

"Stocks, in particular, will suffer with bonds, as surging real interest rates will challenge one of the few remaining valuation cases that looks more gently upon U.S. equity prices, Greenspan argues."

"If rates start rising quickly, investors would be advised to abandon stocks apace, Greenspan’s argument holds."

I agreed with Greenspan. Though US T-Bond reaches it's all time-high in 2016, it also closed with great disappointment and settled around that year low; with great selling pressure. I believe we have seen the historical high for US T-Bond been created in 2016. See above US T-Bond chart.

(see disclaimer)

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