Throughout the financial crisis and during its recovery, global debt increased dramatically in what I call a "debt bubble."
On July 5, 2012, as the yield on the 30-year bond was approaching its record low at 2.45% I wrote, "U.S. Treasury Yields Are Not in a Bubble" Then on July 18 I wrote, "Low Yields Don't Make a Bond Bubble" and the record low yield followed on July 26.
Take a look at the graph shown in the July 18, 2012, post as its shows a bond bubble occurred in the early-1980's when we had double-digit yields. Yields can rise indefinitely but can never go below zero percent.
A major reason for the 2014 bond market rally is that U.S. yields are above other countries' yields. For example, the Treasury 10-year yield closed Thursday at 2.34% with the German 10-year yield at 0.87%.
My focus today is the yield on the U.S. 30-year bond which traded as low as 3.06% on Thursday.
Let's look at the daily graph of the yield on the 30-year Treasury bond.
Courtesy of MetaStock Xenith