Bonds: conundrum city

US government debt looks like a real non-bargain, even after last week’s slight increase in yields. At 3.3%, two-year notes earn a full percentage point less than the current rate of US consumer price inflation. And with Alan Greenspan, still an uber-guru of finance, calling for a government bailout of troubled US borrowers – surely a sign that inflation-fighting is a low priority – why would anyone want to accept a meagre 4.2% yield over 10 years? There’s not much of a fundamental investment c...