Bank Of England Governor Warns Of ZIRP/QE “In Perpetuity”
by Tyler Durden
ZeroHedge.com
Sep 29, 2016
Just yesterday we wrote about how central banks are “running out of road” to be able to provide any meaningful incremental “stimulus” to the economy (see “Bridgewater Calculates How Much Time Central Banks Have Left”). As Bridgewater’s Ray Dalio pointed out, at some point in the not so distant future, the ECB and BOJ will have purchased every eligible security possible. Even if the central banks do continue to expand the scope of their existing programs, eventually they will simply run out of securities to buy.
Ok fine, central banks are “running out of road”, however at the same time they are terrified to rip (or even peel) the band-aid off. This has put the system in an unstable equilibrium: on one hand, central bankers – as even they admit – need to hand over the growth impulse to governments, yet on the other hand, they are terrified of even the smallest change to the status quo as they know they may undo some 7 years of “wealth effect” creation overnight.
How much longer can this charade continue?
The Rest…HERE
