Interesting read. Gross always has insightful comments. Thanks for posting.
When risk of default (bad credit rating occurs) and/or hyperinflation hits, then interest rates adjust upward for new loans to “protect” purchasing power of lenders.
This will hurt outstanding bond holders lock into low interest rates on their notes. They will be forced to sell their bonds for a very low price, to “equalize” the real returns across both types of bonds.
Would hate to be one of those folks..... it’s all in the timing of when you sell those existing bonds....... I just don’t see any muni bonds as “safe” with the rapacious public unions out there BK’ing everybody locally.
So one should move from munis to what?