Good Afternoon Everyone!
OK,
Everything is pretty quiet on the news front so I thought today would be a perfect day for a history lesson.
Watching treasuries sell off over the past couple weeks motivated me to take a look back to The Great Depression to see what happened to bonds in the great 1930's bond collapse. I had always known there was a bond crash during this time, but I really had never focused on the timing of it.
I was able to pick up a great chart highlighting what happened:
Whats interesting here is bonds crashed in 1932 at the same time that equities did. The lows in the stock market occurred in 1932. So why didn't we see another flight back to the safety in bonds in 1932 as stocks were crashing?
The reasons were two fold: Liquidity concerns and fears around inflation as a result of massive government stimulus.
Gee, does this sound familiar?
MORE,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
http://thehousingtimebomb.blogspot.com/2009/05/great-bond-crash-of-1930s.html
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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