Buying bonds is a sucker's bet.

Yields are historically low and possibly negative in real terms. The only way for bonds to pay off is to contemplate a virulent deflation and Helicopter Ben wouldn't let that happen. Whatever the short-term fluctuations, the debasement of the U.S. currency proceeds apace and the unsustainable U.S. debt has to be monetized ( at the expense of the dollar continuing as a reserve currency forever.) The authors make a point that seems not to be as widely obvious as stated: productivity is the most important determinant of economic growth. This is shockingly deviant from Keynesian demand-side-ism (albeit correct! )Not only is this administration ( and, admittedly, the Bushmen to some, if lesser, extent )running up enormous and unsustainable debt: worst is the diversion of resources from the more productive to the less productive members of society. Everything points to this trend from transferring wealth from bondholders to the auto unions, from taxing the job-creating elements of society to an immigration strategy that encourages unscreened, low-value-adding immigrants over immigrating professionals and entrepreneurs. The U.S. is a nation of immigrants but not illegal ones and not ones with only the minimal initiative to walk across the border. The hurdle of crossing the ocean was, itself, a filter with a proper Darwinian effect. American agriculture is not competitive in the world because of the availability of cheap stoop labor.****
http://tinyurl.com/2bc7q2a
The Great American Bond Bubble
If 10-year interest rates, which are now 2.8%, rise to 4% as they did last spring, bondholders will suffer a capital loss more than three times the current yield. By JEREMY SIEGEL AND JEREMY SCHWARTZ
Ten years ago we experienced the biggest bubble in U.S. stock market history—the Internet and technology mania that saw high-flying tech stocks selling at an excess of 100 times earnings. The aftermath was predictable: Most of these highfliers declined 80% or more, and the Nasdaq today sells at less than half the peak it reached a decade ago.
A similar bubble is expanding today that may have far more serious consequences for investors. It is in bonds, particularly U.S. Treasury bonds. Investors, disenchanted with the stock market, have been pouring money into bond funds, and Treasury bonds have been among their favorites. The Investment Company Institute reports that from January 2008 through June 2010, outflows from equity funds totaled $232 billion while bond funds have seen a massive $559 billion of inflows...