Notice the downward trend in the US10Y since the 80's, while government, corporate and consumer debt has exploded to all time highs. The achilles heel of massive debt levels are high interest rates, which end up causing slowed growth and economic contraction. With ever higher levels of debt, the level of interest required to put the economy in pain falls over time - thus why we see crashes and corrections even as the US10Y spikes to levels far below the historical average (~6.18%).
Last year we popped above the "danger zone" trend line and we saw what happened. Watch out for interest rate spikes, it can save your ass.
Commentaire
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This was meant to be a much longer-term chart, looks like the scaling got messed up on upload.
Agreed, the 10Y breakouts above most relevant recent 10Y highs in January and October immediately preceded the corrections in both cases. However, I'm trying to find information on real vs nominal corporate and consumer debt and can't seem to find it, please link me if you have the information. I read all the time that corporate and consumer debt have reached "record" levels, but, if the debt is being measured on a nominal basis it's most likely but headline click-bate.
Derivati_Capital
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@vergun, using data from stlouisfed.org and assuming we are measuring inflation in terms of CPI, we can find the growth rate of both inflation and corporate debt since, say, 2008. CPI has grown from 212 in January 2008 to 252 in January 2019, an increase of roughly 19%. Nonfinancial corporate debt has increased from 3.4T to 6.24T over the same time period, an increase of 83.5%. Thus the inflation adjusted growth of corporate debt since January of 2008 is around 54%.
Real Rate of Return: ((1 + nominalRate) / (1 + inflationRate)) - 1
Also included below are links to information on consumer debt, however inconveniently cryptic (in terms of real consumer debt outstanding) without further calculation or research.