Yield Curve July 2012

First just look at the drop in the rates in the above. This is unheard of in Treasuries. Perhaps it states that we have entered the negative interest domain. Now look at the following:

This is another view, although the short term rates are de minimus, the long tern rates are collapsing. The question is how much of this is the FED propping up the Treasury. No for a final look.

Three month rates have recovered from zero but 10 year rates are collapsing below any prior level. The spread has dropped to all time lows. Yet there is no investment other than in the Government sucking up all the printed money. This will be a very deep hole if we can ever climb out of it. Frankly I do not see why the "economists" are missing this one.