Is the U.K. going to be the next example of “Quantitative Failure”? The jury is still out, but the early evidence is pointing in that direction. Why do I say that? Well, the Bank of England’s move to boost QE, buy corporate bonds instead of just government bonds, and otherwise add more alleged “stimulus” is causing U.K. yields to plummet very far, very fast. That’s exacerbating an already disastrous pension fund liability crisis. And that, in turn, resulted in a QE “failure” yesterday – with sellers refusing to sell the BOE all the bonds it tried to buy, even at artificially inflated, above-market bid prices. It’ll be interesting to see if this proves to be yet another “tipping point” moment, akin to when the Bank of Japan tried to jawbone the yen lower – and it surged instead.
U.K. Next Example of QE Failure?
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if our fed would raise rates, the rest of the world would not have to lower rates. the cure for negative rates in dozens of countries is for america to raise rates. it’s all relative. our economy can handle it, but it will hurt for awhile.