How do we know the bond/note yields represent a flight to quality? I have been reading it as US Government purchases. Is there some way to differentiate and to know which cause is accurate?
A lot of this in my view has to do with the Chinese, they don't allow their currency to float on the world markets and they are sitting on a surplus of something in the neighborhood of 12 trillion US dollar up from a couple of trillion a decade ago. They have to put that money somewhere and it goes into mostly US treasuries.
Until there are US jobs created to drive wage inflation and the demand for US debt drops to a factor of say 1.5 I'm much more concerned with the prospect of deflation.