The Great Inflation of the 1970s destroyed faith in paper assets, because if you held a bond, suddenly the bond was worth much less money than it was before.
Sentiment: NEGATIVE
At some point, the dollar has to give. You can't just keep printing money, and monetizing debt, and buying bonds, without the dollar imploding.
I do know that throughout history, all paper money has eventually come back to its true value, which is zero.
One day we will have more inflation, and our bonds will bleed like a pig. The only reason for buying long bonds is short-term or as a desperate haven for terrorized investors. But the potential to make longer-term real money is naught.
We know that inflation distorts economic behavior. In the 1970s, a combination of high tax rates and inflation prompted investors to flee production in favor of protection.
Bond investors want growth much like equity investors, and to the extent that too much austerity leads to recession or stagnation then credit spreads widen out - even if a country can print its own currency and write its own cheques.
Buy a $100 U.S. bond and frame it to teach your children about inflation by watching the U.S. bond value diminish to almost nothing over the next 20 years.
There is a disconnect between the film Bond and the literary Bond which is their contemporaneity. I don't suffer from that.
The only bond worth anything between human beings is their humanness.
The spectacle of a great, solvent government paying a fictitious price for gold it did not want and did not need and doing it on purpose to debase the value of its own paper currency was one to astonish the world.
I knew it was going to be enormous because of the number of people who bought the books, but, to be honest, I never thought it would be bigger than Bond. Never in a million years.
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