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Government bonds and most bond and fixed income investments are being bid up as people fear the impact of the problems in Europe. Its a flight to quality.

But the implication that bonds will continue to rise in the future seems misguided. One hopes markets will settle down once Europe comes up with some workable solutions.

Meanwhile the large deficits from most major governments probably means inflation and rising interest rates as soon as economies stabilize. That should drive bond prices down.

Bottom line, I think bond prices are a bubble.
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