What Tulips and the Great Recession Have in Common
Most people would agree that the bond market is expensive. But is it in a bubble? Alan Greenspan thinks so. So will this bubble be popping anytime soon? Bloomberg's Jonathan Ferro explains....
========== First, letâs rewind to two decades ago,Alan Greenspan famously warned of what he called...Now the former Federal Reserve chairman says
investors worried about excess in stocks mightbe better off worrying about bonds.people betting that prices will only go up.Like the infamous tulip mania in the 17th
century.It happened in Holland...where prices for
tulip bulbs skyrocketed...and then suffereda spectacular collapse.The problem - prices of tulips got way out
of line with their intrinsic value.Prices of bonds⦠well they have been climbing
for decades.In recent years borrowing costs for governments
have hit record lows in many countries andwe can easily point to two basic reasons for
that.One: since the financial crisis, central banks
have been buying trillions and...
