Greenspan warns about bond-market bubble -Is He Lying?

Greenspan warns about bond-market bubble - MarketWatch



Alan Greenspan says we are in a bond bubble. Of course, he wants people to sell their bonds because there is a shortage of bonds for use as collateral.



Also, he wants borrowers from the big banks to believe that interest rates will rise so they give up their floating low interest side of the bet for the more "secure" fixed higher interest rate. The banks take the low floating side because they know rates won't go up anytime soon.



So, Greenspan is a liar, in my opinion. A comment was made in response to the article by Bob M., and here it is:



 For the past 140 years, the yield on 30Y treasurys has averaged 200
basis points over the rate of inflation (it doesn't matter if you don't
believe the CPI data - this has been the correlation over time).  Right
now the yield on the 30Y is 285 basis points over the current CPI (which
is essentially running at 0% YoY), so one could argue that the current
yield on the 30Y is almost 50% higher than the historical norm (thus
indicating value, not a bubble). Real yields are the only thing that
matter...


Other comments not trusting Greenspan have been brutal and insulting. Perhaps the Maestro deserves them. He wants low rates as I wrote at Seeking Alpha.



The regime of low interest rates that we have today is a direct
result, in my view, of Greenspan's quest to make sure the big banks of
today do not suffer the fate of the S & Ls. The low interest rate
regime is almost foolproof, in that it is based upon the massive demand
for treasury bonds in the interest rate swap market.
Unfortunately, built upon this seemingly noble Greenspan quest for low rates is the
derivatives' new reality. Tools to keep interest rates low appear to be
dishonest. We had CDO risk management scams, off balance sheet hiding of
bad loans, and we had the LIBOR scam and the dishonest drive to keep
interest rates low as seen in the interest rate swap scam.

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