The odds are five out of six, or about 83%, that interest rates will rises, albeit with breaks and intervals, for the next 20 years, according to Loomis Sayles vice chairman Dan Fuss. The first inning has yet to start, but the pitchers are throwing their final warm-ups in the bullpen, he explained.

"Demographics are such; that it's why I say 20 years," Fuss remarked at Loomis Sayles annual press meeting on March 5. "Then we are into a totally different world."

Fuss, who was Morningstar's Fixed-Income Manager of the Year in 2009, has spent nearly half a century managing bond portfolios, and he knows something about the proclivity of fixed-income markets to stay in long-term secular trends. He spent the first 20 years of his career in a secular bear market for bonds, and the next 30 in a secular bull market.

The early stages of this next secular bear market could be rather mild, as the Federal Reserve Board exits QE2 and waits to raise interest rates gingerly.  "If a currency gets on a destructive path, nominal rates will go through the ceiling," Fuss remarked. "But I think it will be more orderly."

Fuss doesn't foresee a violent bloodbath like bonds experienced in 1987 and 1994 in the near term. Ten-year Treasurys are like to end 2011, at 4.00%, up from the current 3.4%, unless foreign entities sharply reduce their purchases of U.S. Treasurys, in which case the ten-year could go as high as 4.50%. At some juncture during the next two decades, Fuss says it wouldn't be shocking if some Treasury maturities sported double-digit yields.

What could derail Fuss' scenario? Demographics. "On an interim basis, you could get a productivity boom," he explained. "Right now, 56% of the population is in the workforce," he said. "In the late 1990s, it went to 64% and the federal budget went into a surplus."

The days of a federal budget surplus look a lot more distant than 11 years ago, but stranger things have happened. Anecdotally, this seems to be happening in, of all countries, Japan, where Fuss hears that more than a few people in their seventies and eighties are getting bored on the golf course and going back to work.

Stunning as it sounds in today's high unemployment world, some demographers have speculated the U.S. labor market could start to run low on workers late in this decade and this could keep older workers on the job.

The folks at Loomis Sayles were far more optimistic about equities. Richard Skaggs, senior equity strategist, thinks the S&P 500 could hit 1,400 this year and breach its 2007 high of about 1,560 some time in the next two years.

As for bond investors, Fuss detects one ray of sunshine for those who don't get trounced reaching in the wrong place for yield. At some point, bonds will offer investors income again, as opposed to the slim yields they throw off today.