davidstockmanscontracorner.com / By Satyajit Das at MarketWatch /
Since Lehman Brothers went bankrupt in September 2008, the world’s central banks have injected more than $12 trillion under QE (Quantitative Easing) programs into financial markets. More than $26 trillion of government bonds are now trading at yields of below 1% with over $6 trillion currently yielding less than 0%.
These policies, according to policy makers, have been crucial to the “recovery.”
Stock market valuations have increased but remain reliant on low rates and abundant liquidity. The effect on the real economy is less clear. Policy makers argue that without these actions to support growth, employment and investment would have been weaker. It is a proposition that is, of course, impossible to test.
Whatever the initial benefits, low rates and unconventional monetary policy are increasingly counterproductive.
And now there is increasing confusion about future interest rate policy.
Markets expect that stronger U.S. employment numbers will drive a rate rise in December. Puzzlingly, Federal Reserve Chair Janet Yellen has also hinted that more QE or negative interest rates are also possible, should conditions dictate.
There is little agreement among Fed governors about the appropriate policy path for the U.S.. Meanwhile, other central banks are cutting rates.
The post Central Bank Lunacy—-$26 Trillion Of Government Bonds Now Trading Below 1% appeared first on Silver For The People.