We’ve been keeping a close eye on US Treasuries lately. That’s because the bond markets are full of useful information about the real state of the economy. For one, they tell us how investors really feel about government wastefulness.

Yesterday, the yield on the 10-year Treasury bond rose sharply to about 3.7%. This is still well below the 5% it hit before the credit crisis. But it is a clear sign that bond investors are concerned about the amount of money the government is borrowing to ‘fix’ the economy.

As yields rise, so do mortgage interest rates. Right now, the Fed is keeping them artificially low by buying Treasuries. But pressure is building on the mortgage rates as oversupply in the Treasuries market pushes yields higher.

And with prime mortgage delinquency rates at 6% (more than double the long-term norm) and a quarter of subprime loans delinquent, the government simply can’t afford for