Investors continue to punish Greece, Spain and other European nations for their deficit by driving up bond yields. In the U.S., Treasury rates have dropped despite a surge in marketable debt outstanding. Federal Reserve Chairman Ben Bernanke and his colleagues have placated "bond vigilantes," or market advocates of fiscal discipline, by keeping benchmark interest rates low. "Central banks by keeping rates near zero have basically covered the bond vigilantes in duct tape," said Edward Yardeni, who coined the term in the 1980s.
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