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by mamonster
1362 days ago
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This is the only correct answer I'm seeing so far here. Article clearly states BoE is avoiding rolling margin calls that could get triggered this week. Right now it is all about bailing out pension funds. One other note: They could also be holding these bonds themselves on leverage. They could be asked to post cash as collateral for these bonds(which are now essentially risky assets). |
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The main problem, its now almost impossible to avoid extreme hyper-inflation (which inevitably will cause a repeat event but much worse) and when the mechanics force it back there will be a deflationary cycle (that feeds on itself).
There have been a lot of policy mistakes over the past two years. Selling more bonds in an environment of rising interest rates is what a fool would do.