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  • Writer's pictureRobert Baharian

The one chart...yields at all time lows

It feels like surprises no longer have the same impact they did - its like being told Santa Claus is not real, it doesn't have the same element of magic. In today's chart we look at the yield on the US 10 year bond. The chart goes back to 1962 and shows us the yield peaking 15.41% in 1981 - the good old days when you could ear double digit returns for letting your money sit in the bank....good times, ey - and the constant decline to where we are today.

The US 10 year government yield just hit a fresh all time and multi century low, hitting 0.536%. Think about that for a second. You lend your money to the US government for ten years, and in return you will receive 0.536% interest each year - just wow. These new lows are following the COVID-19 sell off in March.


In fact, rates are at a 234 year low, believe it or not. During this time, the US has been through depressions, deflation, wars, market rises and falls, and never have we seen yields as low as we are being faced with today. At the same time, the stock market is up and as strong as ever, Tesla and Amazon's share price is going through the roof. Meanwhile, government balance sheets are expanding as fast as they ever have. You'd be forgiven for scratching your head and wondering what this all means.


Are we heading for one of the greatest financial and economic collapses of all time? Is this the new normal? Or are we heading toward a New World Order? What we know is that the things we don't know are far greater than the things we do know. Just as no one predicted the pandemic of 2020, nor the impact on the jobs market, nor the speedy recovery of the stock market, nor the positive impact the pandemic had on e-commerce and tech, it's hard to see how this track of the market instills confidence in market devotees. What we can do is play the hand we've been dealt. It's a game of odds, and anything can happen.

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