What happens if interest rates go up to the old rates of 6-7% ?
The government will not be able to pay the interest on treasuries unless they default or print money beyond today's rate..........either way, the bond holders are skruud.......
Treasuries are doomed !!
Money will run to the stock market........
Treasuries will collapse.
Then the final fall will occur.
Since no one, except Milton Friedmann, called the 2001 collapse
And no one (maybe Peter Schiff) called the 2008 collapse
I suspect the really smart analysts and the 1000 PHD's at the Fed will not call this next one either.
Bonds will do fine. People who buy bonds and hold them will get their interest every year. The people who might be hurt by bonds are traders hoping to make a quick buck by betting on direction of interest rates. Most of these people should not be in bonds in the first place.