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Topic: Trumpled (Alternative Leading) (Read 181438 times) previous topic - next topic
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Re: Trumpled (Alternative Leading)

Reply #1755
I'm not an expert but I was told it's not "banks" but the central / reserve bank buying government bonds, which is a critical difference to commercial banks buying government bonds, it's the government / central / reserve bank buying it's own bonds to put cash into the system. The money they buy the bonds with was printed yesterday, and if you let the process run wild you can end up like Zimbabwe with 1000% inflation, so the governments walk a tightrope trying to balance the rate they print cash with the rate of GDP and other external sources of income!

A friend I have likes to describe it as "Your backyard pool trying to fill itself with it's own water!"

The US Government writes itself an IOU every time it prints some more cash, one that will never be honored!

You are correct LP it is Central banks, I should have been more clear....Some CB's ie ECB actually purchase corporate bonds as well, Its about driving yields down by purchasing long dated govt bonds across the structure. It Influences yields and borrowing across the private and corporate sector after cash rates hit rock bottom.
Cant see us getting negative rates like in some other countries but I can see QE being used...unemployment rates will be the trigger IMO.

Re: Trumpled (Alternative Leading)

Reply #1756
Interesting perspective from the Europeans at Davos, they basically ignored Trump, he conducted news conferences to mostly the US media that came with him to the conference.

It looks like the Euro media has pegged his fake claims and accusations as school yard bullying.

Who'd have thunk that ignoring the bully was the best way to deal with him! :o
The Force Awakens!

Re: Trumpled (Alternative Leading)

Reply #1758
Hmmm , it seems quantitative easing has now become a cheque directly to voters in the USA!   ???
The Force Awakens!