QE

Why aren’t bond investors reacting with more alarm to the process of money creation? 
One possibility is that, with inflation and deflation both plausible consequences of a debt crisis, investors are spreading their bets, buying gold as a hedge against the former and bonds as a hedge against the latter. Another factor is different time horizons. Inflation may be the eventual result of QE in a few years’ time. But in the short term the risk appears to be deflation.

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