The Fed is at zero and will hold it there for awhile. Banks may borrow at 0% and purchase Treasuries that yield 2%+, thus earning an easy (and relatively risk-free) profit. Additionally, I expect hedge funds (those that are left) will borrow in $'s and invest those funds in higher yielding instruments and currencies, much the same way the Yen has been used for the past decade. Is there a way for the retail investor to synthetically create this cushy situation for themselves?
Nonsense. Buy the Mar 09 30yr bond futures, the carry is in the spread. Ths is one of the many implied carry trades available to the retail trader.