From Porter Stansberry in PSIA:

Here's a great investment trick question...

Would you have made more money in U.S. blue-chip stocks or U.S. government bonds in the roughly 30-year period between 1980 and 2009?

The answer, of course, is bonds.

Few people will believe you. After all, the first thing we're taught about investing is that risk is correlated with return. (That's a giant lie... In fact, the opposite is true.)

So when you explain to your friends they would have done better by simply holding one of the lowest-risk assets in the world - U.S. government bonds - than investing in their stock 401(k) plans, be prepared for an argument. But it's an argument you'll win...

The numbers are plain to see. Anyone using a Bloomberg terminal can simply look them up. Starting at any time after 1979, an investor in 20-year Treasuries, rolling them over every year, beat the Standard & Poor's 500 through January 2009.

But that, as they say, was last year.

Now... let me tell you an even more important fact most people simply don't recognize: Last year was the worst year since 1978 for U.S. government bonds. The chart below shows the huge bull market in U.S. government debt. It lasts around 30 years and saw yields on government bonds fall from around 15% all the way down to less than 4%. Rates on 10-year government bonds have nearly doubled since last year. I expect this trend toward higher rates (lower bond prices) to continue - for a long, long time.

 

This trend - toward higher interest rates in the United States - is the single most important trend in finance. The great bull market in paper money, central banking, and the faith and credit of the United States is over. After all, our leaders have no faith. And we have no credit.

Crux Note: In the latest issue of PSIA, Porter details the two best ways to profit from this trend for the next decade or more. If you haven't already made these two trades the backbone of your portfolio, you're missing out on a huge profit opportunity. To learn more, click here...

More from Porter Stansberry:

Stansberry: How to fix the U.S. dollar

Porter Stansberry: Why most investors always lose in stocks

Porter Stansberry produces best government rant you'll read in 2009