File today's chart under "bad dreams coming true."

In case you hadn't noticed, the government's efforts to spur the economy have come in two forms: massive spending and cheap money.

In some ways, it's not a bad move. Interest rates are at historic lows. Any economist worth their salt would tell you it makes sense to spend and borrow more when rates are low.

The problem is low rates don't last forever. And when they rise, it ripples throughout the economy -- especially one with a $14 trillion debt hangover. But this isn't just a government problem. If you're breathing, you better care about rising rates. They touch everything...

In addition to making it more costly for the government (actually, U.S. taxpayers) to finance trillions in debt, rising rates mean you'll pay more to finance a house or a car. They can make business investment less attractive, meaning slower job growth and lower profits. It's not a stretch to see that rising rates can also lead to a falling stock market.

That's why I'm keeping a close eye on the yield of the 10-year Treasury note. Tracking this yield gives a good idea of whether it's getting cheaper or more expensive for America to borrow. Right now, it's getting more expensive in a hurry.
 

Given its importance, the breakout above 3.5% in the 10-year yield has me a little worried. For Ben Bernanke and others in charge of seeing us through the recovery, it's more likely a bad dream keeping them up at night.

Despite the rising rates, there is still plenty of good news for market bulls. In fact, tomorrow I'll show you a chart that says U.S. consumers are back to their old spending ways -- even if the headlines don't make it seem that way.

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