This is the argument for replacing the promissory notes with a very long-term bond.
FORBES: How Much Would Ireland Benefit from Replacing the Promissory Notes with a Long-Term Bond?
The long-term bond market is also very accommodating today for companies that do not have leveraged balance sheets.
It is long-term bond yields, and the mortgage rates allied to them, that give the economy its tempo.
Long-term bond prices could then drop even more than equities already have dropped.
Vanguard Long-Term Bond shares are currently trading down about 0.8% on the day.
With any long-term bond the investor is at the mercy of interest-rate fluctuations.
This is Mr Bernanke's preferred cure, but it has not stopped deflation in Japan, where long-term bond yields are 0.6%.
Investors are attracted to property by the gap between rental yields, around 3.5%, and long-term bond yields, now around 1.8%.
American mortgage rates have already risen sharply in the past two months, in line with the jump in long-term bond yields.
ECONOMIST: The higher they climb, the further they will fall
Nor is it just the threat of higher short-term rates and inflationary pressures in America that is driving long-term bond yields higher.
Over the past three years real long-term bond yields have been on average 1.4 percentage points higher in New Zealand than in Australia.
ECONOMIST: Should Australia and New Zealand form a currency union?
That strategy worked well when long-term bond prices were falling sharply.
When long-term bond prices were rising, managers came to regret it.
Here is a spreadsheet that I have put together that illustrates why a long-term bond is preferable for Ireland to the current promissory note arrangements.
FORBES: How Much Would Ireland Benefit from Replacing the Promissory Notes with a Long-Term Bond?
And by putting downward pressure on long-term bond yields, it may require the Fed to raise short-term interest rates more aggressively to cool down the economy.
In the event the ratings agency cut Greek long-term bond ratings by two notches to B from BB- and said that the outlook may bring a further weakening.
The yield of the benchmark long-term bond hovers around 1.2%.
That has helped drive up long-term bond yields from 2.53% the day after the Fed's announcement to 2.8% now, precisely the opposite of what QE was meant to achieve.
This is not a problem if you hold a bond to maturity (unless you recently bought a newly issued long-term bond), but it will adversely impact bond fund prices.
FORBES: Buffett's Right, Bonds May Fall Victim To Inflation But Hold Them For Now
There are people who will reach for yield either by going to a high-yield bond fund or maybe a long-term bond, but those, for me, pose a little bit too much risk.
Many women say that, over the years, the trust they place in advisors, who have helped them through everything from the purchase of a new car to a divorce, becomes the foundation for a loyal, long-term bond.
Washington now controls long-term bond yields, promises low interest rates years into the future, makes bets on trillions of dollars in bonds, dominates the home-mortgage market and regulates myriad aspects of banking and investing in the U.S. and abroad.
Uncertainty over the timeline for a resolution in Europe and falling levels in the stock market have also helped drive investors into safe-haven assets like U.S. Treasuries, which has left the 10-year bond today yielding 2.11% and the 30-year long-term bond yielding 3.13%.
FORBES: Even As Treasuries Go Higher, Downgrade Fears Return
However, the model also suggests that, if lower interest rates are to revive the economy, a cut of 2.5 percentage points (the size of the cut until this week) would normally be expected to have lifted share prices by 22% within a year, reduced long-term bond yields by three-quarters of a point, and left the dollar 5% weaker.
Vanguard Long-Term Government Bond ETF ( VGLT) seeks to provide a diversified exposure to the long-term U.S. government bond market.
The only options for investors were to buy contra funds or strategically shift to holding bond funds, particularly long-term government bond funds.
The slope of the yield curve can be measured in varying ways but is conventionally thought of as the long-term government bond rate minus the short-term government bond rate.
FORBES: Ken Fisher Likes Toys, Semis And More For The Rebound
If you own bond funds, you can either opt for funds with shorter durations or create a fund barbell by mixing long-term and short-term bond funds.
FORBES: How To Get More Diversification With Less Interest Rate Risk
The rise in medium- and long-term government-bond rates has already taken many by surprise and has led to howls of protest from politicians.
For traders, says Mr Jarnefelt, "information is everything" though as long-term investments, bond prices are particularly sensitive to events with long-term impacts.
应用推荐