Naked Capitalism has a great summary today of the conundrum we are in.  On the one hand, the need to encourage shifts toward risky assets requires relatively low rates of return on Treasuries.  On the other hand, the need to finance huge deficits requires relatively high rates of return on Treasuries.  Either the deficits have to go down or, relative to the price of Treasuries, risky asset prices (stocks) have to go down. Which will it be?