All claims
Long-duration nominal sovereign bonds are structurally not a deflation hedge in this regime: the two post-1980 tailwinds (declining real rates, demographic bid) are both reversed, and the 1939-1979 financial-repression analogue — positive nominal but deeply negative real returns by policy design — is the correct template. The 30y UST real return 2020-2025 is ~-3.8%; Japan is the completed test case.
—high confidencestructural
as of July 31, 2026
What would prove us wrong
- 30y real yield positive amid deficits
- Trigger: DFII30 > +1.0% for 4 quarters AND primary deficit > 3% GDP
- Long bond real total return turns positive
- Trigger: > 0% annualised over a rolling 36-month window from sub-2% 30y start
Posture implications
- accumulateshort-duration T-bills (SGOV
- accumulateBIL)
- accumulategold (GLD)
- accumulateTIPS
- avoidTLT
- avoidEDV
- avoidlong-duration IG corporates (BLV
- avoidVCLT)