A little over a year ago, I was called just about every name in the book for stating, in the face of supposed never ending printing, that the long bond is something everyone should own. You can read the original piece here.For a number of years now, we continue to hear about how the U.S. government is supposedly "bankrupt" and the only investment one should own is hard assets to protect ourselves from the impending collapse of America. The logic goes something like this: as America prints money, the rest of the world will somehow demand payment in full and stop funding the U.S. debt, thus causing a bond market collapse. This bond market collapse will cause interest rates to skyrocket, thus crippling the country with interest payments that are not affordable based on tax receipts.All of these arguments sound logical on the surface, but they unfortunately do not apply to the current monetary system in which we exist as a nation today. Primarily, the rest of the world does NOT in fact "fund our debt." Tax receipts also "fund nothing." Rather than beat that drum in this article, I would highly encourage the reader to read these articles:
Read the rest of the post at Business Insider, Hyperinflation: Where is Thy Sting? Case for the Long Bond by Tim Ayles.
h/t Scott Fullwiler