Buying Treasury bonds will never be the same. The problem with the bond market is that there’s no clarity and that make trading difficult. On one hand, the Fed has given us clarity by informing us that interest will be low for the next two years. In all probability, the Fed will hold onto the recently purchased 1.5 trillion dollars of treasury bonds for a long time to increase stability in the bond market. On the other hand there is the difficult economic reality of huge American and Europe government debts and unemployment.
Meanwhile, America, due to its unmanageable debt, is in a recession. The problem is that America has no ECB or Germany to bail us out. Low interest in the Treasury bond market will force investors to other venues which are more risky but will bring greater reward than treasury bonds. Blue chips multi-nationals seem to be relatively safe investments. The safe haven treasury bonds are presently a thing of the past because near zero interest isn’t really an investment but will just erode the value of one’s money.
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