Ten year treasury yield, 1.5%

Now we face transaction costs, in my estimation.  This is near the lower limit.  An investor could invest in private ATM machines, using vault cash and make 1.5%.  1.5% is a good benchmark for the cost of using cash, the expense of distributing bearer paper.  This yield will kill cash and create the SmartCard market.

 Here is a chart, courtesy Bloomberg's Brian Chappatta:

We have lower rates because we have dedicated entitlement and pension payments for about 25%  of the economy. The household consumption pattern has adapted to the burden, hence the relative decline in consumer prices ex medical and housing.

How low will rates go?

Folks, we have a fairly accurate double entry accounting system, and it tracks the cost of price volatility, this accounting system has a pretty good idea  that the Swamp is not doing any discretionary spending soon; and the three large blue have serious pension problems.  The most probable path forward by far is lower discretionary spending and lower yields on Treasuries.  For the dollar.  

But therein lies the rub, the dollar is technology replaceable in part.  We could see a monetary system in which the tax dollar is suplemented by private crypto-currency issuance.