by Boo_Randy
How long can the Keynesian fraudsters at the BoE stave off the inevitable financial reckoning day by buying up their own debt with created-out-of-thin-air “money”?
Carefully communicating this isn’t a Pivot to QE but a temporary “backstop” to calm a panic. And it calmed the panic with minimal purchases.
This was the infamous Pivot back to QE: The Bank of England announced on September 28 that it would buy up to £5 billion per day in long-dated UK government bonds (gilts) “in a temporary and targeted way.” It said specifically, “The purpose of these purchases is to restore orderly market conditions.” It said the program would expire on October 14.
This came after long-dated gilt yields blew out last week, with the 10-year yield on September 28 getting close to 5%. Panic had broken out after highly leveraged UK pension funds with £1.5 trillion in assets had received margin calls on their gilt-based derivatives linked to their liability-driven investment (LDI) strategy (explained here). The pension funds had started to dump gilts along with other assets to meet those margin calls, thereby creating a death spiral for gilts.