The yield on long-term Treasury bonds briefly touched a low of 6.08% last Thursday, the lowest rate of return on a long-term government bond since January 1973, and Blue Chip Economic Indicators dubbed the current recovery, now 28 months old, "the slowest in post-world War Il history."

At least there is a nice consistency there. Consumer prices in May, June, and July rose at an annual rate of only 0.8%, which makes real long-term bond yields equal to roughly 5 1/4%, relatively high when compared to other inflation-adjusted yields over the past half century. Granted that a 0.8% inflation rate is too good to be true, but prices definitely are behaving-better. As Ed Yardeni of C.J. Lawrence said last week, "Strong deflationary forces are pushing the December-to-December rate down to 2%."

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