Long-bonds may not be long...

Indian government has planned to bring 30 year bonds at much higher-rates than the rest of the world... Bonds are frequently traded by the central-banks and commercial-banks to change short-run interest-rates, as the Federal Reserve of the US was buying-in bonds to increase liquidity or money-supply that reduces (relative) investment demand and reduce interest-rate, when either demand is down or supply is up interest-rate goes down... More money-supply increases the ability of commercial banks to lend more and they try to cash the scale.... Nevertheless, bond interest-rate and bond prices are inversely related... Bonds may look long-term, but it is bought or sold frequently in the market... When you sell bonds they fetch you money, calculated as per interest-yields and bond-prices, too... Bond-prices and interest-rate also change with inflation and expectations... Banks are smarter than ordinary people to invest in bonds in big amounts... It is more popular among banks than the ordinary public because its value is more protected by inflation and price-rise, because when interest-rate on bonds goes down bond-price goes up and when interest-rate goes up bonds prices go down which compensates to the loss in the value of investment due to inflation... One of them will increase... Even when bond-interest is zero bond-prices may increase... And, this may sound good to an intelligent investor like banks than to the common people... But, as we have seen above, bonds are traded by central-banks to change short-run rates and thus bond prices... It is true that bonds are profitable investment, but no one actually knows what long-run rate and prices will be, because you may be enticed to sell it early than you expect, either bond interest-rate will help or prices... In the developed-world interest-rates have gone down in the long-run and bonds are trading very low... When you once surrender bonds you lose your long-run claim and it may not be available in the market again... It may look long-run, but we have to go through short-runs and, changes in expectations and condition of the economy...