First, as mentioned, they are being priced based on extreme monetary policy that will not be sustained in perpetuity.

    Second, they are incorporating very limited expectations for inflation, which we believe will occur and perhaps in dramatic fashion.

    Third and finally, government bonds will eventually have to reflect the declining credit worthiness of the Unites State based on the United States' deficit as a percentage of GDP and growing debt to GDP ratios.

    Treasury bonds cannot stay at their current yield level forever. And while we have seen some correction, yields and prices for U.S. government bonds are still at generational extremes. In reality, though, just as it took decades for interest rates to come down from the meteoric highs of the 1980s, it will take interest rates time to go up, and it is likely that no crash is imminent. So even if there is a bubble, there won't likely be a "pop." This move will be long and sustained.

    From an investment perspective, the most effective way to play the re-pricing of Treasuries over time is to be short Treasuries out right, or to play a narrowing of the spread between treasuries and corporate bonds.

    The reality is, gentleman -- and ladies -- do prefer bonds. But, only when the price is right.

    --Daryl G. Jones is Managing Director of Hedgeye.