So What About the Risk of Inflation?

From the FT.Com today comes news that interest rates on short term U.S. debt has been bid into negative territory. The lesson here? Watch what they do and not what they say. We have been treated to a deluge of "news" lately on an impending inflation disaster arising from public sector debt. Well, if that is the case, then why are banks and others willing to pay the U.S. government to lend money to them, suggesting that defaul and inflationary concerns are, ahem, somewhat exaggerated.