Bonds meet the four criteria for defining a bubble

Bloomberg/John Authers

Graphic image of hand holding pin about to prick balloon“There has been a tendency since the financial crisis to label any market that is rallying or deemed overvalued to be in a “bubble.” The word has become overused and debased. But if we treat it rigorously, the bubble concept is still vital in navigating financial markets. And the rigorous treatment reveals that bonds really are in a bubble.”

USAGOLD note: Authers reviews the work of Longview Economics’ Chris Watling who uses Charles Kindberger’s criteria as outlined in “Manias, Panics and Crashes” to determine if the bond market is in bubble.  Watling concludes that bonds are in a bubble.  Authers agrees. An interesting read at the link above. . . . . .

Re-post from 8-14-2019

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