Even Paul Kedrosky, who is normally irreverant in covering economic news is calling the changes in US debt markets “hugely important developments“.

The price of long-term US debt has been falling steadily for the past six months, with an acceleration in recent weeks, and a “massacre” taking place just yesterday.

This is really scary. As Ambrose Pritchard-Evans points out, “Governments worldwide have to raise some $6 trillion in debt this year, with huge demands in Japan and Europe.”

With falling prices, yields go up. There will be increasing competition for scarce capital, which means that eventually borrowing costs are going to increase for everyone.

Tom Vanderwell over at Bloodhound Blog has a great post on how this might impact housing markets.

If governments are unable to borrow to fund their “stimulus” programs, then they will have to resort to any number of otherwise deeply unpalatable options:

1- not spend the money. otherwise known as austerity- cut salaries, cut programs, generally reduce the size of goverment spending. (examples: Latvia, Ireland, Iceland…)

2- take the money peacefully, otherwise known as taxation- not terribly popular either. (examples: just the UK that I can think of so far)

3- take the money forcefully. Hugo Chavez and what´s he´s done to Venezuela as an example of this.

4- just create the money. Hello Zimbabwe?

Of all the alternatives, 1 is really the most responsible. But 4 is the least painful short term and so the easiest to get away with.

No wonder some investors are making statements like they are “100% sure that the U.S. will go into hyperinflation“.

Keep a close eye on America´s yield curve…if it continues to steepen, then get ready for the start of “crisis chapter 2″.

It’s been interesting to see how twitter has evolved the past couple of years. There seems to be no single way of using it usefully; like blogs, different people/companies use it differently. Here are some use-cases I’ve been observing:

- vanity feed: telling the world about me, me, me – “I like spaghetti”, “I think blue is better than purple”, blah blah..
- marketing: my company just did this, my company just did that, special promotion on today
- short-form communication: “good to see you at the conference, @whoeveryousaw”, “@same, yeah, you too; see you next year”
- voyeurism: just reading what people we’re interested in are writing (celebrities, respected people in our field)
- trends: who’s talking about specific things (#amazonfail, #budgetbond) – and how do people feel about those things.
- sharing links: this is replacing the old way of doing things, which was to email a friend something you thought was interesting. Now you just have to publish a link you find interesting and all your followers will have the chance to see it.

So I’ve decided to jump back in and give it another shot. What’s my use case? It will have to come naturally, but I suspect what I will enjoy doing most is sharing links I thought were interesting, and leaving comments on brands I want to draw attention to for positive or negative feedback. We’ll see how it goes.

If you’re interested in following, my username on twitter is also yannick.