Tuesday, December 22, 2009

For those of you not in the financial markets...

...the U. S. Treasury yield curve (stay with me) is now at a record 280 basis points. What on earth does that mean? Simply put, it means that the difference between long-term interest rates and short-term interest rates is at its widest spread ever. Not helping.

Okay, try this. If you're a tea-bagger, the record yield curve means hyper-inflation! Weimar Germany! Buy gold! Buy a gun! (okay, another gun) Buy canned goods for the basement! There's a black guy, er, African-American gentleman in the White House! (See, even the tea-baggers can be politically correct.)

What does it mean for the rest of us? Well, at least some inflation certainly, but also economic growth. It's a green shoot! I don't want to get too carried away here, but it's always worth noting a record anything.

No comments: