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After the stellar 2010s, the bond market performance has been disappointing in the 2020s. According to technical analyst Francis Hunt, this post-2020 rout marks the end of a 40-year debt bull market.
In his view, sovereigns and large institutions are increasingly forced to preserve capital in hard assets rather than chase paper gains.
Debt Cycle Is Rolling Over
For Hunt, the global financial system has moved past the easy-money era that began in the early 1980s. Since the 2020 bond-market capitulation, he argues in a recent interview, yields have entered a structural reversal marked by “ever lower highs and ever lower lows” in debt prices and an eventual nominal devaluation of the instruments themselves.
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Furthermore, the shift has, in his opinion, changed how investors should read headline gains in equities and other risk assets. What looks like growth in index levels is, in large part, the denominator effect of weakening fiat purchasing power.
“It’s not the same dollar anymore,” he remarked. In such an environment, nominal wealth expands, while real wealth contracts. For Hunt, that dynamic makes gold the pressure valve.
“The debt crisis is the turbo juice for gold,” he remarked, arguing that capital starts prioritizing preservation over return. Investors stop asking what can compound the fastest, and start asking what can’t be printed, diluted, or blocked.
The “Hotel California” Liquidity Regime
The treasury market, in Hunt’s view, is a one-way architecture – an easy entry, but constrained exit. “You can check out any time you like, but you can never leave,” he said, recalling the evergreen lyrics.
Instead of outright liquidation, creditors are pushed toward swap lines, repo facilities and borrowing against the collateral they already own. That creates what Hunt sees as a manufactured asymmetry: buyers are welcome, sellers are constrained.
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He cites U.K.’s 2022 liability-driven crisis, strains at the California State Teachers’ Retirement System, and recent pressure on Gulf states in the aftermath of an Iran war. In each case, the system responded by constraining liquidation and extending liquidity against pledged assets.
