Central banks are encouraging excessive risk taking in the bond markets, setting the stage for the next financial crisis. Bill Gross is right - bonds are a systemic risk bubble right now.
Conditions are ripe right now around the globe for an absolute crash in the bond market, similar to a prolonged drought setting the stage for a forest fire that does so much damage it becomes a natural disaster. Once the preconditions are set, it just takes one small match or event to kickstart the entire natural disaster or financial crisis black swan event.
Central bankers are the most irresponsible we have ever witnessed; the current irresponsible risk taking makes subprime lending look like child's play. Just wait until the budget entitlements hit the balance sheets of the Federal Government in 2018.
The Fed is so focused on the micro, they are completely missing the big picture of 19 trillion in debt, and an entitlement's cost curve coming down the pike where bond yields are going to spike to epic proportions. You can just imagine what happens when the "new normal" is the other way around in much higher interest rates, because no investor wants to be caught holding the bag on this unsustainable and onerous debt.
The short termism by the Fed and other central banks is astounding for what are supposed to be conservative economists, not rogue traders going out on a limb. They literally have become extreme versions of rogue, irresponsible central bankers!
This will never end well, and the more they encourage excessive risk taking in the bond markets, the more they set the stage for an even bigger reversion to the historical mean market crash - the essence of a Black Swan Event. However, this one is so predictable, it is telegraphed a mile away, sort of like playing with fire in a chemicals plant.