Official failure QE: Sweden has not coped with the main task
Probably have all the experts
and analysts rattled the world on how to
dangerous program of quantitative
easing, although a couple of years ago about
it wrote only the bravest
economists. But then came the confirmation
- the example of Sweden officially indicates
that QE can not fulfill even its
The main purpose.
in fact, many experts have warned,
that the redemption of bonds by central banks
will lead to a rapid drop in liquidity.
But attempts Fed, ECB, Bank of Japan initially led
to "phantom" liquidity, stocks
grew to record levels without any
fundamental reasons. Today
the world's major financial media and
Serious scientists are saying about the collapse
liquidity in the bond market. TO
eg, a strategist at Citigroup Matt King
writes that the complete lack of liquidity
the bond market - the result of intervention
the central bank. But so far no one
hurry to solve this problem, because
Much more dangerous is
the impact of the quantitative policy
easing, central banks themselves.
See for yourself. In theory
the basic mechanism of QE is to reduce
bond yields, because
Investors should be interested in buying
more risky assets - stocks, for example.
And it worked until the volume was
small, but once QE beyond
certain limits, additional
bond purchases have led to the
the continued growth of profitability. can
this be? Yes, and it has already happened -
Sweden first in the world faced with
phenomenal situation when the program
quantitative easing led to
a marked increase in the government bond yield.
According to the chief
economist at Danske Bank, financial conditions
generally went beyond the standard
speakers: "Currency and profitability
moving in the wrong direction.
Bank of Sweden wanted to reduce the profitability of
and to lower the krona, but recently they
We have begun to show the opposite
dynamics. This became a problem".
- he said. Back in April, the yield
10-year-old Swedish bonds was at
0.2%, and at the beginning of the week indicator
It rose to 1.1%. By five-year securities
yields became 0.4%, although two months
ago it was negative. investors
can still earn extra
15 basis points, if they keep
10-year bonds with a rating of Sweden
"AAA" instead of similar securities
And all this because
the repo market has no available assets
because of the QE program by the central bank of Sweden.
Deflation is inevitable, experts say:
problems with QE there is also the problem
dynamics of the krona. Since the beginning of the program
purchase of bonds of the Swedish krona
It has appreciated by more than 4% against the euro, 5% - to
the crown of Norway and 3% - the dollar. And now, falling import prices and the central bank
I can not do anything for
The result was that
quantitative easing led to
completely opposite results,
and the Bank of Sweden in general drove himself in
angle. As economists say, is
future threatens many developed economies,
if central banks do not reconsider
its policy. And, most of all, for Sweden
it's too late to do anything.
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