Crowding Out

``As a result of this panic into “safety”, other sectors of the credit market are shutting down. Meanwhile, we’ve had a bubble in the Trashury market. This cannot continue because the cash available to invest in Trashuries is going to dry up as the commercial paper market lemon gets squeezed dry while the supply of Trashuries continues to explode. The result will be skyrocketing interest rates. Those who buy longer term Trashuries at today’s levels are going to get absolutely killed.''