In late 1974, long-term gilt yields peaked at 17%. In 2020, following a multi-decade bull market, they bottomed just below 1.4% (yields fall as prices rise). This wasn’t just a UK phenomenon: around the world, $18trn (that’s 12 noughts) of bonds, including 40% of all government bonds, were trading on negative yields at the end of 2020. Investors were paying governments to lend them money. History will show this to have been the biggest bubble of all time.
The sceptics’ argument against government bonds is simple. Governments are under constant pressure from voters to spend money but keep
