I was a super bull of long-term bonds. I stated my case over 3 years ago with a yield target on 30-year maturities of 2.5%. Back then, the timing and structure looked right for another run to new highs. Discussions about hyperinflation were premature.
The pre-condition I had been waiting for has now arrived. In my opinion, we have seen the end of the bull market in bonds.
There is a delicate balance in time, where mega trends and short term trends meet. Price has now shaped reasoning and convinced investors of future stability, and such conviction could not come at a worse time. You see, we are heading toward the D.I.I.G. Can you dig it?
The Demographically Influenced Investment Gap is one giant mismatch of assets to liabilities. The growing future needs of financing in equities and bonds cannot be matched with future available disposable savings.
This will create great opportunities for long term patient investors as assets compete for your dollars.
Hyperinflation in the sense that people understand it today will not surface as expected as it is not straightforward.