Suprisingly the opposite. They have to competitively bid on secondary market bonds to drive prices higher, paying a premium to primary market banks and accepting yields lower than inflation.

One of my favorite quotes about QE comes from one of the writers on this site. “who would be dumb enough to competitively bid to lose money in the bond markets? No one but taxpayers.”

Canadians should be asking a lot more questions about who gets to buy the premium and then sell it them in the first place. In the US it’s GS primarily and they make out like bandits on the taxpayer’s dime.

The article notes that quantitive easing is the process of the BOC buys government bonds. Is it correct to assume that the BOC must pay a premium for those bonds in order to entice bond holders to sell? Are these purchased bonds the very same bonds the central bank issued previously?

The other question: I thought quantitive easing included the central bank purchasing corporate bonds too, at least in the US. Has the BOC been purchasing corporate bonds too?

Privatize profits, socialize loses. Socialism for the 1%, capitalism for the rest. Socialists get bailed out whilst your average joe will need to go to bankruptcy court and be in perpetual austerity. Not the case for the 1%.

Recall? LOL

Canada doesn’t even tell you what the governor’s investments are. In the US their investments were open and showed Fed staff was profiting from their decisions. Now the BoC has been following their lead and ignoring inflation because of, what?

When you pull forward demand, eventually there’s a gap of buyers that didn’t compete. If you push forward demand, you create a gap. If you pull forward the demand for too long AND then have to push forward demand to manage inflation, you create a liquidity trough.