The text answers the question: The central banks are buying the bonds in a scheme that essientially boils down to print money until debt levels no longer matter.
The money printing causes:
- Inflation (as in rising consumer prices)
- Massive swings and bubbles in the financial markets
- Increasing wealth inequality
This has happened until now in a global coordinated manner. This was also the policy after 2008.
However it seems that challenge today is that China is not willing to print money at same level as Europe and USA. The question is what happens then?
Yes. The Chinese currency will go up compared to the dollar and the euro. However I think effects will go much further than that. The stability of the west will be challenged and the dominance of our financial markets will decay.
In the end, the existance of a big economy, that does not embark in the same aggressive monetary policy as we do, will put a hard limit on how far we can go.
The money printing causes:
- Inflation (as in rising consumer prices)
- Massive swings and bubbles in the financial markets
- Increasing wealth inequality
This has happened until now in a global coordinated manner. This was also the policy after 2008.
However it seems that challenge today is that China is not willing to print money at same level as Europe and USA. The question is what happens then?
Yes. The Chinese currency will go up compared to the dollar and the euro. However I think effects will go much further than that. The stability of the west will be challenged and the dominance of our financial markets will decay.
In the end, the existance of a big economy, that does not embark in the same aggressive monetary policy as we do, will put a hard limit on how far we can go.