Since the Moody’s downgrade of U.S. Treasury debt, interest rates in the world’s largest financial market have started to rise again. But a Bloomberg News article on May 19, “Bond Investors Detect Trouble in U.S. Debt Stripped of AAA Rating,” warned of a bigger problem. Treasury debt, doubled in just the past five years, is being issued larger and larger volumes, but in shorter- and shorter-term bills and notes, which have to be rolled over by new issues almost every year. And the demand for this short-term debt is being provided by $7 trillion in money-market mutual funds, specialists in the repurchase or “repo” derivatives markets, while the demand for middle-term Treasury notes is increasingly dominated by hedge funds speculating with “basis trade” derivatives and highly leveraged borrowed funds.