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> To reverse the gov must buy the bond back with money from general taxation, on doing so the bond is redeemed and destroyed, and the central bank erases the mo
by DominikR 10y ago
> To reverse the gov must buy the bond back with money from general taxation, on doing so the bond is redeemed and destroyed, and the central bank erases the money it received back in tandem with the bond.
Which is never going to happen. (at least in this political system) Currently Western governments can barely keep things running by increasing their debt at an almost exponential rate.
- redcalx 10y agoI agree. In fact if they inflate the money supply they devalue the currency that the debts are denominated in, so there's an incentive to inflate and there's no money to spare to reverse QE anyway, so the bonds remain in existence forever, and all of those legal bindings I mentioned become somewhat academic. Well, technically bonds have a fixed term, but in reality they just issue new bonds to replace the old ones as they reach maturity, so again we're back to smoke and mirrors.