When stocks go up, bonds go down. When money is cheap (DXY - 0.91), then people sell bonds and buy stocks. When money is cheap, the government buys bonds in order to offset this inverse relationship.
Over the longer term (5 years), the government actually makes money buying their own bonds, and selling them later at higher prices. Eventually, stocks get too expensive, and bonds get too cheap.
Either way, you make money buying stocks and bonds, when money is easy to get. It just takes longer with bonds. Since most bonds yield 2%. And most stocks 8%.
TheMarketDog2
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@tradeBob1, exactly, so why aren't people selling bonds now that they are expensive relative to stocks?
Over the longer term (5 years), the government actually makes money buying their own bonds, and selling them later at higher prices. Eventually, stocks get too expensive, and bonds get too cheap.
Either way, you make money buying stocks and bonds, when money is easy to get. It just takes longer with bonds. Since most bonds yield 2%. And most stocks 8%.