http://www.cnbc.com/id/40564296

Economist Nouriel Roubini on Wednesday voiced concern over a compromise on extending tax cuts struck by US President Barack Obama and Republican leaders, saying the agreement could expose the US to bond vigilantes who will drive up bond yields.

Bond vigilantes – the term was coined by economist Ed Yardeni in the 1980s to describe major investors who demand higher yields to compensate for the perceived risks resulting from large deficits - could derail the country’s precarious recovery, some economists say.


 Chinese central bank adviser Li Daokui said on Wednesday the fiscal health of the United States was worse than Europe's, and that the dollar had so far been shielded from trouble because markets are still focused on debt-laden European countries.

US bond prices and the dollar would fall when the European situation stabilizes, Daokui said.

Here is my previous breakdown of long-expiry US Treasury bonds:  http://gregnguyen.blogspot.com/2010/07/httpwww.html

This is what I did in an attempt to hedge against rising bond yields (and interest rates):  http://gregnguyen.blogspot.com/2010/01/bubble-in-treasury-bond-market.html

Note the usual disclaimers in the left side bar and disclosures in the linked blog entries.