With US Treasury bills yielding little or nothing and government bond yields plunging everywhere as central banks creep towards a Japanese-style zero interest rate policy (Zirp), there is talk of a government bond bubble. But is it possible to have a bubble in the most boring form of IOU?

When it comes to aerated finance the best authority is Charles Kindleberger, the economic historian who devoted much of his life to studying manias, panics and crashes. His basic definition of a bubble was "an upward price movement over an extended range that then implodes". Speculation was an essential part of a story in which investors were buying not for income and capital gain, but with a view to re-selling on a short-term basis to someone else at a higher price - a phenomenon sometimes known as the "Greater Fool Theory".