The Treasury Bond Collapse is Real.

The prices of U.S. Treasury bonds have now collapsed over 50%, and the yield on the 10-year treasuries has hit its highest level since 2007. But is this a problem? For some investors this represents a major economic crisis, but for others, maybe this isn't the financial crisis we should be worried about.

★ ★ CONTENTS ★ ★
0:00 The U.S. Treasury Bond Crisis
1:05 How Bond Prices Crash
5:45 How Will This Impact You?
7:10 Who Suffers the Most?
9:00 The Inverted Yield Curve

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[matturner]

A failing U.S. economy and elevated global tensions reduce the likelihood of prolonged inflation or higher long-term Treasury yields. I've seen folks amass up to $1m amid crisis, and even pull it off easily in a favorable economy. Unequivocally, the bubble/collapse is getting somebody somewhere rich

[geraldt]

We can't ignore the potential impact on portfolios. Bonds are often considered a safe haven, and if they crumble, investors like me might scramble. I’ve been investing for 11 yrs and my $1m portfolio has never been this depleted, how i do hedge this?

[CynthiaByrd]

I'm concerned about a potential treasury bond collapse and its impact on my $500, 000 bond investment, mostly in 10-year bonds. My stock portfolio recently took a hit, losing nearly $150k, making it a turbulent experience.

[hammerfist]

I took a long hard look at the 60-40 ratio and decided it was dumb when interest rates are historically low. It's a lose-lose. At best, your bonds get a horrible return, and at worst, the bonds crash if rates rise. In my IRA I went 70-30 stocks & cash (to buy dips) and that's worked out way better.

[hankmarks]

The financial sector and derivatives may have a Hindenburg moment if the US Treasury market collapses.Rising market illiquidity in the $14.8 trillion U.S. Treasury market, according to Bank of America, might affect other financial markets.

[KNOTSakaMPH]

As always, extremely well explained. Thank you for making such informative videos. A lot of people could benefit from them.

[waveril]

So we should not buy bond etf? like BNDX

[lagrabavana]

Best explanation ever. I never understood inverted yield until I watched this video.

[adityadora]

This is by far the best YouTube channel when it comes to investing. I can’t thank you enough. I’ve followed new money for about 6 months now and I can finally understand the market after 2 whole years of losses. And things are looking good now only thanks to NM. Thanks 🙏 once again

[larrygerry]

Ironically, now is the time to buy bonds

[MattTannahill]

If you want stability, buy bonds. If you want to speculate on changes in the yield rate, buy shares of a bond ETF.

[stevemurzyn]

Thanks, good explaination. I got out of long term bonds and stick to short term T-bills.

[sprinkle]

There is no good reason for individuals to hold low yielding bonds ten years to maturity, just sell them at a loss, deduct it from your taxes, and rebuy new bonds with good yields

[brookss]

I didn't understand the whole SVB bond thing until this video. Thanks!

[fujanu]

Does the point of 9:55 only goes for secondary or also for primary market?

[malte]

YouTube has become crazy popular. Now even Mark Zuckerberg's younger brother has a channel!

[melbmoneyman]

Thanks Brandon. That's the best explanation of how bond market prices can vary with interest rate rises that i have heard. Ditto for your explanation of inverted yield curves.

[cc-dtv]

thanks for the money wisdom chad money

[wholeNwon]

Good explanation for those who need some of the basic facts. The most appropriate "strategy" for most UST bill/note/bond investors is to construct a "ladder". I have done this and every week or so a T-bill, note or even bond matures. The principle and interest are then reinvested to maintain the cash flow and structure of the "ladder". I never sell and thus avoid any potential loss as long as the world's financial system remains intact. The unexpected need for funds does not necessarily require the sale of bonds at unfavorable prices thus incurring loss. One can use a bond portfolio as security for a security-backed line of credit (SBLOC). Depending on the use of such funds, the interest paid may even be tax-deductible.

[lunahenckel]

People blindly dump money into bonds when it seems that's the least effective way to utilize treasuries. You should only buy bonds that will outpace inflation. When the treasury is issuing bonds that we can reasonably expect to outpace inflation over a 20-30 year long period (8%+ coupon rate) those bonds in effect mature as soon as interest rates drop. This is because at such a time you can sell the bond for more than the face value, allowing you to cash out the bond with much of the interest it would have yielded, but much earlier than it would have taken to mature. This maximizes bond yields while maintaining liquidity when your bonds are likely to be up and stocks are likely to be down. The opposite is true when rates are low, other investments that historically return ~8% will easily outpace a bond that can't match the inflation of the current market. The bear market will force low rate bond holders to realize massive losses on low interest treasuries while investors scoop up more and more new bonds, earning historic growth when rates eventually fall again. Prioritize 30yr bonds over all other assets when inflation is high.