Pretty much yes what you said is true. However most bond holders (not traders) don’t purchase them for appreciation, but rather income. The simple intent is to hold them to maturity and collect the income. That is why you hear about retirees purchasing them.

In a free market yes I would agree with you. I am sure you have heard many a pundit talk about that bond bubble we are in. Many consider this to be the final bubble, that is, when (not if) this bubble pops there will be hell to pay. As you know the market is anything but free and as we saw in Japan, rates can be kept low a pretty damn long time.

Like I said, the reverse ETFs offered give you the opportunity to be a bond bear but they don’t operate as much in your favor as you think they would.