[nascarnation]

I learned my lesson on bonds in the early 80s. As a young married couple with two good incomes, and getting killed by pre-Reagan tax rates, we mistakenly went heavily into muni bonds.

Then the Carter inflation killed bond prices, I lost my job and needed to cash them in.

[rbg81]

Ha. I don’t believe this for a nanosecond. The Central banks will not allow bond yields to to go up, period. Governments simply can’t afford the interest payments. If UST yields went up, the effect would be quickly self correcting as US+Europe+Japanese Governments would go bankrupt and we’d in a world-wide depression (forget recession) within months.

If you want to know where we are headed, look at Japan. Zero interest rates as far as the eye can see.

[Bratch]

[Cheerio]

The bond skeptics are having another moment, as talk grows of a "great rotation" from bonds into equities, as rates finally start to rise, and the economy turns back into the old normal.

Unemployment between 8-15% depending on which "U" one looks at is the "turning back into the old normal? Coulda fooled me. I am sticking with my bonds for now, Fed is manipulating everything and interest is not going to be allowed to rise.

[Vince Ferrer]

In a rational world, interest rates would be sky high now. But these days they are being held down by the federal reserve. I don’t believe the federal reserve can raise interest rates, because doing so will raise the amount of money we will have to use to pay off the bonds. It will be a fiscal cliff larger than the fiscal cliff. The federal reserve knows this, and does not want to be the one to torpedo the economy. If private investors rotate out of bonds, then the federal reserve will be forced to pick up the slack and buy more bonds themselves.

[Jonty30]

I would never borrow money to buy bonds. As I understand the bond system, you’d essentially be borrowing money to,loan money to a company. That’s not financially sound.

If I were to buy bonds, it would be straight cash, I think.

[montanajoe]

They are overbought as much as anytime in the last 55 years but I dont see that changing anytime soon..maybe 4-5 years out.

To really have increases in the rates over that time we will need job growth and wage competition..something that's not in the cards.

Seems to me for the average person the interest rate play is to get the lowest rates possible on any debts they have and buy equities not bonds with any new money

[familyop]

Yields will go up, when the bond collapse begins.