“The Bank currently expects to conduct Asset Purchase Facility gilt sales operations in the fourth quarter at a similar size and frequency as had been previously announced,” it said.
Those who say they’ll never do it could still be right. We’re about to find out too.
They will probably start, just to try and justify their ‘independent’ tag. Then after a month or two something will break in the markets, and it’ll be about turn.
Lets face it they have been doing QE on and off (for increasingly less important reasons) for what, 13 years now. And have never in all that time managed to find a sweet spot when they could unwind even a fraction of it. And now they’re going to try when the government is planning on borrowing hundreds of billions on top of their usual extravagance, and the economy is nosediving into a recession. Its bound to go horribly wrong somehow.
Do you genuinely think that this is a sustainable course of action? And if it isn’t a sustainable course of action is there any likelihood that there will ever be a suitable point when it can be unwound? Doesn’t the example of Japan over the last 30 years show us when you enter the twilight zone of money printing to try and save yourself from a massive monetary collapse you never escape it?
Bung it all into Undated Zero-Coupon bonds.