So?
This means that investors are so pessimistic about the prospect of making positive returns on their money in ANY investment over the next three months, they are willing to lose money, just to be sure they will be getting almost all of it back.
Does that sound like an inflation scare to you? Me neither.
Hold on there!
I thought we were going to get all kinds of inflation, you say, because the Fed is churning out new money into the money supply chain! Well let's look at some graphs I found at Mish's place.:
Base money supply: Increasing!!!!1! zOMG! Inflation everybody panic!
Hold on there.
Money actually getting out there which would be able to cause inflation: going negative. Hint: opposite of inflation = ?
Money going straight to the greedy banks who refuse to lend (to anyone that won't pay back loans or else pay a reasonable interest rate, a.k.a. "heading towards a sane balance sheet"):
no, the 1st and 3rd are not the same graph. Look again at the titles and the height of the hockey stick at the "right now" end of the graph.
aaaaand last, but not least, another anecdotal argument that we are headed for a pretty nasty deflationary period with a good dose of Depression thrown in for good measure: Please note the last time the money supply chart looked like it does right now, and consider what happened right after that.
Are you starting to get the picture yet?
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