The yield is what it is because of the belief that other bets cannot yield more without a much higher danger of losing all that gets bet.

Prices cannot go up and down simultaneously.

Oh, and there's no such thing as a monolithic, general price level.

Each thing has a price, which derives from the ratio of the amount of the thing and the amount of money swapped for each other.

This swap rate varies in relation to the perceived worth of all things being swapped on the earth.

On any given day, a man can awaken to discover he longer yearns to own his sail boat, so its worth to him falls to nil, yet it can fetch a street price only as high as the next guy who opens his wallet to buy it.

Right now, men with gobs of money are saying this by their acts, "We do not believe in buying capital, hence giving credit to manufacturers of wanted, but unneed things for living. You know, things like iPods, sailboats, inlaid marble countertops.

"Instead, we shall buy future claims on the needed things of life, foodstuffs and energy. For if any man is left standing, he shall need to eat and to power the few things he has aleady.

"Next, we might buy some metals needed for building stuff, making stuff. For if any manufacturer is left standing, he shall need resources to forge the few items he can sell."

That said, after getting the sub-text of Paulson's speech today on Freddie's Fannie, I figured it was a good time to short >20 yr US bonds. With that kind of news, and the ongoing Treasury drain of three or four wars, I can't imagine that US bond bears will stay asleep for much longer. Historically, I don't recall any period of time during or shortly after a war that price levels for non-discretionary goods like food and energy did not rise significantly, especially for those hosting the standing armies.