Keep pulling the thread on The Great Bond Car Wreck.
The yield on the 30-year U.S. Treasury bond has risen to its highest level since 2007, just before the global financial crisis.
In Japan and the United Kingdom, the 30-year government bond yield has reached its highest level of the 21st century.
The recent surge in global bond yields is driven by uniform concerns among investors about government fiscal space and future inflation.
The U.S. government deficit is currently running at approximately 6% of GDP.
Investors are increasingly concerned that governments in developed economies will be tempted to inflate away their high debt levels by pressuring central banks to print money.
The recent trigger for the bond market sell-off was the failure of China to pressure Iran to reopen the Strait of Hormuz.
The U.S. Treasury market has significant vulnerabilities due to high leverage in the basis trade and the swap spread trade.
Japan's bond and currency markets have been in a sell-off similar to the UK's Liz Truss crisis for the past two years.
Despite continuously rising long-end government bond yields, the Japanese yen has been falling, a worrying anomaly for a G10 currency.
Emerging market currencies are experiencing a long-term trend of appreciation against the US dollar, driven by a convergence of central bank credibility with G10 standards.
The Japanese yen-Mexican peso carry trade has generated a higher total return in the current decade than the S&P 500.
The valuation gap between the equity earnings yield and the 10-year Treasury yield, which favors holding bonds over stocks, is at its widest level since 2002.