Bond Market Equally Confused by a Hyperinflationary Hoax

A bubble never will be widely acknowledged until there is no more easy money to be made.

I have taken off my robe;
How can I put it on again?
—Song of Solomon

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If you simply cannot get enough sophistry passing for good investment guidance, then you should love this piece analyzing whether the bond market is in the grips of a bubble...




Ever since there was an Alan Greenspan, the game has been all about inflating securities. However the present go-round requires the backing of what until recently have been among the most stable credits. These have been induced to profoundly leverage their stake. Yet like less stable credits preceding them, these once super safe credits will need to honor every last red cent they are putting out.

Hope of avoiding an inevitable, chaotic collapse of leverage is foolhardy now that the physical means for servicing a still-growing mountain of debt have been destroyed. You think otherwise? Then why are the finances of the lender of last resort — our government — under attack? Were there in fact good prospect that, the physical means for servicing debt will materialize, then surely there would be no concern over our government's deficits. Truth is there simply is not enough "something" being made out of "nothing" whose benefit assures all financial claims can be easily met. This fact alone speaks of the tragedy of our government's backstopping mortgage-backed securities and a raft of other financial derivatives, rather than prosecuting such fraud as led to this present, awfully vulnerable state of affairs.

—Tom Chechatka