Waiting for August 2

4-week T-bills now being auctioned for 0.000% CreditWriteDowns

HT DeLong

The Treasury curve is steep, and has gotten steeper recently. Oil is holding price. Retail velocity on a one month period. Think of that curve as the amount of bandwidth allocated to Congress, using smooth math. In information units, the curve is the amount of inventory slop, imprecision allocated to Congress. The next peak of  imprecision implies Congress needs to solve a shortage appearing in seven years.

So we are only making price decisions on a one month rate, and evaluating a seven year inventory cycle. The Ricardian Squeeze.