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I have a question goldenboy.
During the crisis the average maturity of US treasuries took a nose dive, and the average maturity has really been decreasing since about 2001. Only recently has it begun climbing again. What, if anything, does this change represent?
x -axis = year
y - axis = average maturity of debt held by the public (in weeks)
From looking at the graph, i am going to assume that the line represents all treasuries.
On the surface, a declining maturity is a sign of shrinking yields, which can be explained by an increase relative to proportion in short term debt issuance. This has occurred not only on the governmental front, but in private debt markets as well. The rise of money markets along with various SIVs (structured investment vehicles) undoubtedly played a role.
The change however shows (IMHO) that long term deflation (even extremely low inflation) is unlikely.
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