300 years of wars show they are ‘always disaster times’ for holders of government debt because of inflation and financial repression

A study by the Center for Economic Policy Research reveals that government bonds, traditionally viewed as safe investments, have historically performed poorly during wars and major crises, resulting in average real losses of about 14% for bondholders. This trend is attributed to increased government spending, inflation, and financial repression, which have led to significant declines in bond performance compared to equities and real estate. With the U.S. facing rising national debt amid ongoing military conflicts, these findings underscore the potential risks for investors in government debt and the broader implications for fiscal policy.