via Bank Of Canada - Selected Treasury Bill Rates

Weekly Wednesday treasury bill rates have been on the decline, but not enough to warrant a policy change. Treasury bill rate declines suggest a collapse of credit, because of the onset of demand for short term bills. Canadian rates have remained much higher than U.S., U.K., or Eurozone rates as long as the housing bubble is in vogue.

In the U.S. a spike in short term rates is assumed to mean that purchasers of treasury bills are selling them. But with Quantitative Easing in effect, short term treasury bills are supplied to excess, where the capital is then used to buy long dated treasuries. A massive supply of bills might cause some selling, but in general the largest players are divesting and going to cash.

This is a massive displacement of capital, though it might not be enough to prevent interest rates from rising in the interim on the long end of the yield curve.

Forex might be stuck in ever more restrained trading ranges, if the use of derivatives set market prices and predations are to continue. The path of least resistance is a rise in gold prices, where currencies are effectively being devalued against the commodity.

http://www.bankofcanada.ca/rates/interest-rates/t-bill-yields/?page_moved=1

-F6