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iShares 20+ Year Treasury Bond Message Board

  • rangetrader123 rangetrader123 Mar 13, 2013 6:55 PM Flag

    FT: Bond bubble will end in as much pain as housing bubble

    This is a FT article and I am not able to post the link.

    Sir, Ben Bernanke is no more the maestro than Alan Greenspan: the only difference is that the latter created a bubble in housing and the former a bubble in the bond market (“Bernanke: a good engineer who knows his own limits”, Edward Luce, March 11). Both Fed chairmen have kept real interest rates below zero, which by definition creates a bubble in asset prices and misallocation of resources. Mr Bernanke can point to the ebullient level of stock prices and Mr Greenspan could have cited the boom in housing prices and construction.

    The point is that the current bond bubble will end in as much pain as the housing bubble. Neither chairman has been willing to allow free markets to operate to avoid short-term pain. As a result, the ultimate outcome of their actions has been and will be considerably worse.

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