[grey-area]

We could return to the times when governments didn’t buy their own debt using an intentionally convoluted and obscure process involving third parties in order to prop up asset values and suppress risk free yields.

See the linked graph above for evidence of just how abnormal the last decade has been.

QE is a failure on its own terms. It was to be targeted and of short duration and to promote growth and suppress inflation. None of those objectives were achieved and we’re now addicted to it in ever increasing amounts, along with zirp. What do we do when the next crisis hits if we don’t normalise rates and bond buying again? How will the bond market function when the gov owns more than half its own debt? How will stock markets function when governments step in to buy even corporate bonds indiscriminately with new money?