Zero interest rates forever?

[Buster]

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Um, well... yeah. Liabilities appear on balance sheets. Your point?

Your account get taken over by kertejud2 or A790?

My point is that the "market" doesn't have much say in rates. If CBs monetize their debt, then their rates can stay low. Canadian provinces are unique monsters because they hold enormous sub-sovereign debt compared to almost any other sub-sovereign jurisdiction in the world (ie they can't monetize their own debt because they can't issue currency directly).

Whether they should LET the market determine rates is a whole other conversation, of course.

[suntan]

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My point is that the "market" doesn't have much say in rates. If CBs monetize their debt, then their rates can stay low. Canadian provinces are unique monsters because they hold enormous sub-sovereign debt compared to almost any other sub-sovereign jurisdiction in the world (ie they can't monetize their own debt because they can't issue currency directly).

Whether they should LET the market determine rates is a whole other conversation, of course.

You were either dead or not paying attention in the 90s.

The current Liberal regime is hellbent on permatizing the CERB. This will add billions upon billions of debt. No, you can't just "monetize debt" forever. Dude, that's literally printing money. What the Liberals are doing is expanding M0. The literal supply of money that's available. That leads to monetary inflation. Each dollar is worth less and less. That will eventually lead to higher interest rates, because if they don't no one in the world will actually buy the debt that Canada's offering.

This is exactly what Trudeau v1 did in the 70s that caused stupid interest rates in the 80s and 90s.

It will also affect the USA eventually as well, and other nations that have directly expanded M0.

I take it you had absolutely no idea why QE did what it did eh?

I take it too you were perplexed as to why Ralph Klein was so hellbent on extinguishing Alberta's debt. Some of that debt was paying out at 11%.

[Buster]

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You were either dead or not paying attention in the 90s.

The current Liberal regime is hellbent on permatizing the CERB. This will add billions upon billions of debt. No, you can't just "monetize debt" forever. Dude, that's literally printing money. What the Liberals are doing is expanding M0. The literal supply of money that's available. That leads to monetary inflation. Each dollar is worth less and less. That will eventually lead to higher interest rates, because if they don't no one in the world will actually buy the debt that Canada's offering.

This is exactly what Trudeau v1 did in the 70s that caused stupid interest rates in the 80s and 90s.

It will also affect the USA eventually as well, and other nations that have directly expanded M0.

I take it you had absolutely no idea why QE did what it did eh?

I didn't say that that was what Canada was going right now. You said "all debt", and I quoted what the Americans were doing (and could do). And I never suggested any of it is a particularly good idea. Canada is limited in its policy and CB responses compared to the US obviously, which as you say will likely lead to the bond market punishing Canadian bonds. I don't think we're disagreeing on what's happening (are we?), although I'm leaving room for more and more extreme policy to keep rates low.