Even though the European Central Bank (ECB) announced 2 bond buying programs in 2020, including a second one in December 2020, it appears that ECB bankers are panicking that they did not commit to buying enough EU government bonds. Even though the ECB has already committed to buying over 75% of all EU government bonds issued in 2021 before the year started and the ECB's balance sheet is already over 60% of the EU's nominal GDP prior to 2021 starting!
Exclusive: ECB's Stournaras calls for increasing bond buying to calm markets https://mobile.reuters.com/article/am...?EUR<
Surging yields are creating problems for the ECB. And it's split on what to do https://www.cnbc.com/2021/03/10/surgi...?EUR<
The ECB is clearly caught in a Bank of Japan/Japanification vicious cycle of trying to cap yields by buying more and more government bonds with newly created currency units. This is because actual demand for said bonds is very low compared to what the ECB is already on the hook to buy. Maybe this is at least partly why the Dollar Index is starting to rally at least a little?
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Jason Burack is an investor, entrepreneur, financial historian, Austrian School economist, and contrarian. Jason co-founded the startup financial education company Wall St for Main St, LLC, to try to help the people of Main Street by teaching them the knowledge, skills, research methods, and investing expertise of Wall Street. You can also find Jason's work at his blog website at www.jasonburack.com.