Are Government Bonds The Bubble Of Last Resort?

Having lived through two market crashes in less than two decades, the return to high stock market prices last year convinced some market bears that we were already seeing the next bubble start to form. In their annual survey of long-term asset returns, Deutsche Bank strategists Jim Reid, Nick Burns, and Seb Barker argue that the bears have the right idea but are looking in the wrong place - the next bubble is in government bonds, which means that it isn’t likely to burst soon, but the consequences would be severe if it ever does.

“It has long been our view that over the last couple of decades the global economy has rolled from bubble to bubble with excesses...