I think that is just a normal occurrence though. I think that eventually they will go back up in worth, things just seem to swing back and forth like that quite a bit when it comes to finances, politics and etc. I really am not all that worried about it.
Yes, government bonds will continue to drop, because that is the way the market is headed. The government doesn't manipulate the bond market quite as much as it does the federal interest rate. So the bond market will be allowed to adjust on its own. This is a good time to get some government bonds.
Government bonds indeed will continue to drop. The spiral they are on will only continue its downward fate. The federal government is in a pinch; it stands to reason, the bonds they back are in the same pinch. The price of oil has continued to drop and has and will continue to do nothing but hurt the United States economy.
Government bonds are one of the safest investments you can make. The risk is very low in this investment so the rate of return is also low. Bond price is like everything else, it depends on interest rates, inflation, and investor confidence. Bond prices are market driven just like any other investment. Yields may be low right now but so is risk.
No one can be sure that any financial trend will continue for a definite period of time. Bond prices vary with time and market conditions. If a single major investor dumps a large portfolio of of bonds this can set off a chain reaction, but the markets always recover when there is money to be made buying. This trend is temporary, like all the ones before it.