Price signals have broken down in the bond markets - Bitcoin
The beauty of today’s fractional reserve banking system – foundation for three centuries of galloping progress – is that the allocation of private money is not controlled by the state. The central banks provide safe and stable money. They do not – or rather did not – pick winners and losers.
They crossed a line when they began to use QE as a routine tool of inflation management, to the point where the ECB is the preeminent buyer of European corporate bonds, and the Bank of Japan owns much of the Tokyo stock index.
Do we want them to offer bank accounts directly to firms, funds, and households, competing head on with commercial private banks?
This would risk a rush to central bank safety in a financial crisis, setting off a vicious circle.
Ambrose Evans-Pritchard Telegraph 25 May 2021
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