When the government spends more than it takes in via the myriad of ways it robs I mean taxes you, it needs to issue debt.

The US government has been accumulating lots of debt lately.

The government gets this money by issuing Treasury bonds. Of course, just like you and I can only get debt if we are creditworthy, the same is true for the US government. And the market appears to be pricing in an increase in the likelihood of a default -- meaning the the likelihood that the US will be unable to repay its debt. Technically speaking, the US government cannot really default; it can always print more money via the Federal Reserve System. Of course this devalues the currency, so the real risk for holders of US Treasury bonds is that they will be paid back with a currency that is worthless. The infinitely wise Yves Smith of Naked Capitalism breaks it down for you. As this reality becomes more apparent, bond prices will fall, because who the f wants a bond when it is going to be paid back with a worthless currency.

Of course, while default risk is on the rise, it is not here yet. However, the US government continues to need to raise more debt, and there is a peak of sorts regarding how much demand there is for Treasury bonds. To increase demand for these bonds, the interest rates on these bonds will likely need to rise, so that they make the bonds more appealing. Check this article for a full breakdown.

When new bonds with higher yields -- meaning bonds that pay more to those who buy them -- are issued, this sends the price of existing bonds down, as they are less appealing relative to new bonds. Thus, as bond traders know, increases in bond yields are inversely correlated to bond prices. Check this article for a deeper understanding of the correlation.

So pretty much anyway you slice it, the new debt the US government is issuing is going to send bond prices down.

If you're looking to profit from this, you can trade TBT, an ETF on AMEX. You can think of buying TBT as a way of betting that bond prices will fall. Esteemed investors like Jim Rogers and Marc Faber are buying TBT.

Of course, the real story as Yves Smith noted (among many, many others), is that a US default would be cataclysmic, and would like destroy the value of the dollar and send the value of precious metals -- particularly gold and silver -- through the roof.

Invest accordingly.