> ...the market determines the interest rate it will buy bonds at. No, most newly issued government debt in the US, EU and Japan is now bought by their respect

> ...the market determines the interest rate it will buy bonds at. No, most newly issued government debt in the US, EU and Japan is now bought by their respective central banks at below fair market interest rates. Consider that some European banks now charge savers and pay borrowers [1]. Do you really think that a fair market would accept negative interest rates?! 1. http://www.nytimes.com/2015/02/28/business/dealbook/in-europe-bond-yields-and-interest-rates-go-through-the-looking-glass.html http://www.nytimes.com/2015/02/28/business/dealbook/in-europ...