A few days ago we reported, quite stunned, that the US Treasury had redeemed nearly $600 billion in Bills in the month of April. Alas, the side-effects of an massively short-maturity heavy bond curve will be here to haunts us for a long time: according to today's DTS, in the first 4 business days of May alone, the UST has redeemed $144 billion in Bills. Annualized this number is surely something that even Richard Feynman would not joke about. We have gotten to the point where the roll issue is not a monthly concern, but is becoming a weekly funding threat, and even daily. Of course, as we speculated in December, what better way to raise demand for Treasuries than to stage an equity selloff. Well, we got our selloff, and the 10 Year was trading in the lower 3% range today. However, the risk now is how the sovereign fire will spread through the periphery and into the core. Already, we are seeing that CDS traders are massively betting on a collapse of the UK as the next bastion of sovereign spending lunacy. And when the UK goes, Germany is next, shortly to be followed by Japan and the US. At that point the only buyer of US debt will be the US itself. Which will lead to the final outcome of massive consumer deflation as economic collapse finally strikes home, coupled with asset price hyperinflation, as a gallon of oil hits $10 (and helping the Dow hit 36,000). And as this is not an equilibrium state, the outcome will be, as it always is in these situations, war. Hopefully the US is good as it historically has been at finding its "deserving" opponent, WMDs aside. Otherwise, things may be a little rough for the great declining American civilization after the next 5 years.