Season 1 · Episode 345
QE and the bond bubble
Bond prices have been hugely volatile lately. Is there any relationship between prices and free market forces, or is it all at the behest of central banks?
Debunking Economics - the podcast · Steve Keen & Phil Dobbie
April 5, 202337m 50s
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Show Notes
Silicon Valley Bank collapsed last month because there was a run on the bank and they didn’t have the assets to cover their customers deposits. They were trading insolvent, in other words, even though they had switched the money deposited into US Treasuries, supposedly the safest investment on earth. But they bought before the price of Treasuries came crashing down, as bond yields went up. This week Phil asks Steve if bonds now behave just like shares, and how much of the recent volatility is the result of QE by central banks?
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