breaking news- us treasury/dollar rises!, page-24

i think the original question was why US treasuries and USD appreciated in value in response to the downrating of US outlook

perhaps the US politicians will see this as a warning that something needs to be done about the budget deficits. prudent fiscal policy means stronger USD and USD-denominated assets (treasuries). coupled with the end of QE2 in June one can argue that the run-away inflation expressed through the commodity prices in the US may be coming to an abrupt end.

is deflation an option again?

IMO