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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “200 Years of US Government Bond Yields”

1. Lugnut Says:
   March 3rd, 2011 at 12:13 pm

   All those high yield Carter/Reagan era T-bills ought to be finally rolling over finally, no?

2. Alaric Investments Says:
   March 3rd, 2011 at 12:27 pm

   Interesting picture – it would seem that there would be more scope for rates to rise at this point rather than fall…..

3. inessence Says:
   March 3rd, 2011 at 12:50 pm

   Which (maturity) bond(s)?

4. DL Says:
   March 3rd, 2011 at 2:17 pm

   And yet, all the MSM pundits (except for Gary Shilling) keep calling for higher bond yields.

   Makes me think it won’t happen for a while.

5. mark Says:
   March 3rd, 2011 at 2:36 pm

   Great, great chart. Look at the Panic of 1837 (not sure why that’s not labeled), crash of 1873, crash of 1929. In each case, it took 10 – 20 years to reach the low in interest rates following these events. This is also true of Japan circa late 20th century.

   How Mr. Alaric comes to his conclusion is baffling to me.

6. Alaric Investments Says:
   March 3rd, 2011 at 4:45 pm

   Hi Mark –
   I certainly agree with you regarding the recovery periods from 19th century panics, and the great depression and subsequent war period when the 10 year note yield was pegged at 5.5%.

   However – if you merely look at the 4% level on the chart you see that the only time under this level was during the great depression and subsequent war years – you have to ask yourself the question: are we really in a situation like the great depression now and I clearly think the answer is a resounding “no”. (look at the size of GDP drop in the depression vs now, as well as the monetary stimulus now vs then, and inflation now vs disinflation then, particularly in commodity prices)

   I am not looking for a spike upwards in rates (at least not yet – if there is no QE3 then definitely no higher rates yet), but believe that higher rates are more probable than lower rates overall and that we are in a bottoming process.

7. FT Alphaville » Further further reading Says:
   March 3rd, 2011 at 5:00 pm

   [...] 200 years of [...]

8. mark Says:
   March 3rd, 2011 at 5:32 pm

   Hi Alaric -

   I think one has to ask oneself the question: are we in a situation like Japan now and I clearly think the answer is a resounding “yes” (look at the aftermath of a real estate bust and the inability to deal properly with insolvent banks following the financial crisis).

   Commodity prices are a red herring – have you forgotten 2007 already?

9. VennData Says:
   March 3rd, 2011 at 7:29 pm

   “…Carter/Reagan era T-bills…” is incorrect. T-Bills are less than a year. The Reagan-era 30 T-Bonds are being paid off.

   I wonder how many Volker had stashed away in his trust, lucky if he did, he deserves it though.

10. ddl24 Says:
    March 4th, 2011 at 10:22 am

    I can see rationals behind both mark and Alaric’s argument. However, I think one must also look at the total debt level vs GDP. If the economy is highly leveraged, then the capacity to service debt is diminished and it’s a natural counter weight for the yield going higher.

11. andrewp111 Says:
    March 5th, 2011 at 3:57 am

    Actually, the debt service costs are one reason that the Fed must keep rates as low as it can. The Treasury cannot afford to pay sky high rates right now – just like Japan.

    And if one does a linear regression of 30 year rates from the 1981 peak to present, there is a pretty consistent (R^2 ~0.8) drop of about 0.25% per year, smoothing out the short term fluctuations. If this trend continues, 30 year rates should approach zero around 2020. Once that happens, the trend MUST reverse, and rates have to go up.

12. In the Strife of Truth with Falsehood | Poison Your Mind Says:
    April 14th, 2011 at 7:47 am

    [...] Current US government bond rates are low. [...]