TLT cause I’m scared
I posted this as a comment in another thread. It’s a few days old so I wanted to repost to see what the smart money in r/bonds thinks.
May of 2004 TLT hit an all time low of 80.51 since its inception. Unless it hits a new all time low. This seems unlikely at this point, and if it does you’re getting rates close to 6-7% which is pretty close to yearly market average returns (well I guess 10% is the new 7%). Sounds not so bad to me.
Credit card debt defaults are rising, and consumer debt is maxed. Consumer pandemic savings is gone. Retail investor participation is maxed out. Market just hit all time highs (again) and the election cycle is over. Sahm rule has been triggered by rising unemployment. 10y2y bond yield just uninverted from the longest deepest inversion, that I’m aware of, since before my parents were born.
US nation debt is at 120% of GDP (there is nuance to this, but it’s really high). The highest it’s been since the end of WW2. Last time the war ended and we stopped spending money on it, and all the troops came home to work.
Don’t get me wrong I think inflation is going to be how they deal with the debt. But I think some black swan (real or fake) needs to happen for them to justify the inflation to the people. Cause inflation is fun when it’s stimi checks, but it’s horrible once it settles into housing and food prices.
Just the peace of mind sounds like a good deal rn.
I’m in, you convinced me.
What do you guys think? Am I getting bad information? Am I missing something? Or am I just wrong?
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