My first thought was that the markets were expecting inflation to heat up. But that would mean a shift out of conventional Treasuries into TIPS. The rise in TIPS yields tells me that’s not true. Funds are being pulled out of all long-term Treasury securities. While it’s interesting to ask where these funds are going, that’s not the important question. Investors are fleeing U.S. government securities. Perhaps it’s time to revisit the Rogoff – Reinhardt hypotheses. I don’t have time to separate the privately-held debt from the total. But the federal debt passed 100 percent at the beginning of 2013 and is still rising. Perhaps buyers are getting nervous. Continue Reading →