The design of the quantitative easing that they’re doing now shows that lack of competence again. The political constraints they’re operating under mean that while QE is indeed buying bonds and the buying of bonds is pushing yields down, the aim and purpose of the exercise, the QE is buying too many of one set of bonds and not enough of another. Meaning that the wrong yields are going down and the right ones aren’t going down enough.
German government bonds smashed through record highs again on Thursday, a day after the European Central Bankunder scored its commitment to buying vast amounts of top-rated debt to stimulate the region’s economic recovery.
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