The gloomy scenario the “smart money” is betting on.
“there’s the notion that interest rates can never rise again. Even small increases would cause over-indebted companies, consumers, and governments (those that can’t print their own money, such as state and local governments) to go bankrupt simultaneously. In this theory, however unproven it may be, rates can only fall deeper into the negative to keep this house of cards from collapsing. And thus, government bond prices can only rise. That’s the gloomy scenario the “smart money” is betting on.”
Bond Mechanics in a Negative Interest Rate World