1 min readSep 26, 2019
So central banks can drive the demand for sovereign bonds to any level necessary while central governments are creating supply at whatever level their policies generate. The ‘investor class’ gets to go along for the ride, with ever-higher prices for those bonds guaranteed by the central banks. But with price having totally replaced yield to become the only source of demand in that market, wouldn’t that eventually result in crowding out all other bonds, the prices of which would not be guaranteed?