The stats show that the total size of the world stock market
capitalizations closed 2013 at $54.6 trillion which was only 25% of the
total world market capitalization – the rest being bonds.The bond market
is larger than the stock market for various reasons. Whereas only
corporations issue stocks, governments and corporations both issue fixed
income securities. The U.S. Treasury is the largest issuer of bonds
worldwide. Because U.S, Treasury bonds provide the bulk of reserves
which are just over $30 trillion.
This is the real bond bubble. Capital is so accustomed to just hiding
in bonds, it knows no other alternative. We can see that debt increased
sharply in 1928. However, the collapse with the Sovereign Debt Crisis
is what really made the Depression so Great. You can drop the stock
market by 50% and you will not create a prolonged depression. Reduce the
bond market by 33% and you get a depression.
This is why Andrew Mellon first boasted during the 1929 that conservatives were not hurt - “Gentlemen buy bonds.” However, soon the Crash of 1929 turned into a serious Depression and that comes NOT by taking stocks down, but by wiping out the bond market.