Another Bubble: G-Secs This time

Recently as the Federal reserve has cut the target rate to close to zero. The shot term treasury bond in US has jumped to record high levels. Govt. securities because of the backing of government assures investors that they will get their money back. Yields on these shot dated T-bill has gone very close to zero and there were cases where the value of these bonds had gone up over face value of 100. Meaning they were actually yielding negative returns.

Such surge in the govt. bond prices has created "bubble" in the government T-bill market. A security which was considered too boring compared to exotic real estate and credit linked bubbles we have had in past.

One thing is for sure that the previous bubbles were also caused due to ridiculously low interest rate targets set by Greenspan in early and mid part of this decade. What followed after the bubble was something that had impact over economies throughout the globe.

Are we going to face another bubble again stirred off by the Federal Reserve? and in which market is this new bubble going to burst? Treasury Bills? Maybe its too early to take a call, but never forget that the earlier bubbles were equally nascent and not spotted off early.