What is the yield curve supposed to look like? It’s a simple question that doesn’t actually have an answer. And because it doesn’t, there is a whole lot of confusion about bond yields. To wit:

Chadha, the chief global strategist at Deutsche Bank’s U.S. securities unit, is part of a group of die-hard bond bears who say Treasuries have become unhinged from reality and yields have nowhere to go but up. Like many before him, he points to all the obvious signs investors seem to be ignoring: higher benchmark interest rates, wage pressures that will lead to faster inflation, worsening budget deficits that will result in more debt issuance.

Obvious signs? Your argument is already in trouble if your basis is the unemployment rate, a fact established by none other than the UST curve during the past few years. Interest rates have nowhere to go but up, except that they don’t. The shape of the curve is instrumental in arriving at that conclusion.

When analyzing the yield curve, however, at least one dimension is missing. The yield curve is often described in only two, the difference between interest rates at two points along it. That static description leaves out what are perhaps the two most important dimension, meaning time (as in calendar rather than maturity) and nominal.

The current yield curve was at the 5s10s yesterday all of 43 bps. Compared to “reflation” #2 in 2013, that is impressively flat, when the curve three and a half years ago topped out at around 140 bps. On May 2, 1983, however, the 5s10s was also 43 bps, as it was on January 10, 1985, as well as October 23, 1987, just four days after Black Monday.

Already you can appreciate some distinctions. Though their shape in the belly, the 5s10s, is mathematically equal these three curves in their other dimensions tell us a quite a bit that was different. In 1983, the US economy was just then roaring into the full recovery from the early eighties double dip, the last truly robust growth period to date. By the end of 1987, it’s not that growth had become poor, it’s just that it had settled down into its baseline or trend after spending 1983 and 1984 well above it.