the spreads between treasury bonds and other bonds(ZT)

For stock market, we can read a few index describing the whole market. All listed stocks, blue chip all way to ready to bankrupt bulletin board stocks, are calculated in certain overall index. This is not the case of the bond market. For bond market, the obvious index is the US government treasury bond yields (for different maturity). There is no single index which represent the overall market - 1. US federal government Treasury bonds and bills 2. US local government bonds 3. US corporate bonds 4.US CLO (collective loan obligation - mainly loans to business, if amassive business failure happens, we will see similar thing as currentCDO) 5. US CDO (collective debt obligation - mainly those pooled home mortgages) Generally,while the bond market turns, it is NOT the treasury bond price to drop first. Rather, it is the spreads between treasury bonds and other bonds widening. Therefore, there is no surprise that in a deflationary depression, we could see Treasury bond price actually rise for a while(not too short). At that time, people flee away from corporate bonds(especially junk bonds), bonds printed by your county or city governments, not to mention those bonds backed by sub-prime CDOs. Yes, Uncle Sam will be compelled to print more bonds. Yes, eventually, US federal government bonds would suffer a lot. However, in the process of flying to quality, people (don't blame them) will refuse to buy bonds issued by you city and county governments in favor of debts issued by Uncle Sam. In order to protect his own credit line, Uncle Sam will sacrifice local governments', corporates', and your credit lines.