…if a central bank is printing money, and particularly when they are buying long-term bonds, it sustains the prices of those long-term bonds. But in the end, if too much money is printed, the currency will be debased. So all of the QE, those purchases hand-over-fist of long-term bonds, etc, in the end all of that is very negative for the bond market.”
Eric King: “Is this going to lead to some kind of bizarre collapse in Japan, Jean-Marie?”
Eveillard: “There is that risk. Investors are beginning to say, ‘Hey, they want to increase inflation to 2%, as opposed to modest deflation. If they succeed, why should the 10-Year Japanese government bond be selling at less than 1%?’
So, yes, there is a big risk of collapse, and I think to a lesser extent that risk also exists in the American Treasury bond market as well.”
Read the complete article at King World News here.
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