History Shows: All Major Financial Bubbles Burst Following the Same Pattern

Bond yields rise sharply. The market ignores that signal. And then the bubble bursts.
This has happened before in:
• Japan 1989
• Dot-com bubble 2000
• China 2007
And currently, a similar pattern is emerging on a global scale.
In the Japanese bubble, government bond yields increased by over +230 basis points before the Nikkei index plummeted more than 60%.
During the dot-com bubble, US Treasury yields rose about +260 basis points as the Fed continuously tightened monetary policy.
But the market still surged because investors believed the internet would change the entire world.
The result?
Nasdaq collapsed by up to 78%.
In China in 2007, bond yields also surged before the stock market entered one of the largest crashes in the country’s modern history.
The scenario always the same:
💸 Cheap money creates a bubble
📈 Rising yields cause the bubble to burst
And now, look at the present.
• The 30-year US Treasury yield has returned to around 5% — near the highest level since before the 2008 crisis
• German bond yields are at their highest since the eurozone crisis
• UK bonds are approaching the 2008 peak
• 10-year Japanese government bond yields are at their highest in nearly 30 years
Meanwhile:
• AI stocks are leading the market
• Capital concentration is even higher than during the dot-com era
• Stock valuations remain extremely expensive
• Global debt continues to swell
• Inflation has not truly cooled down yet
Notably, investors can now earn nearly risk-free 4-5% yields from government bonds.
That’s a huge pressure on overvalued assets.
Because the entire rally after 2020 was built on the assumption that interest rates would stay low for a long time.
Cheap money has channeled enormous capital into:
• AI
• Technology
• Crypto
• Private Equity
• Real estate
But currently, the cost of capital is rising worldwide. And history shows: when yields surge, asset bubbles often start to destabilize.
Today’s market still behaves as if high yields don’t matter. That’s often a phase where real risks quietly accumulate beneath the surface. ⚠