Very hard to read the article past the quote from Confucius. Still : " dangerously high national unemployment
has led to calls not for government pump-priming but for austerity budgets that are likely further to slow already sluggish economic growth, although such growth is the most plausible source, over time, of higher employment and balanced budgets. This utterly illogical and self-defeating pattern is proclaimed to be the βnew normal.β"
People often say this - these are people who are not scared of the bond market. The fear that governments seem to have is that failure to signal caution will lead to loss of confidence in the market, which will drive yields up, which will generate fear in the market and then render governments unable to raise money in the market. A this point, that would be that - collapse - there is a financing gap and until the structural elements of deficits are removed governments need to be very, very, very wary.
People often say what you said also. The problem is that it doesn't work like that.
"The Bank of Japan can maintain yields on JGBs at whatever level it chooses, at whatever maturity range it targets, and for as long as it likes. The bond market investors are incidental to that capacity and are supplicants rather than drivers."
People often say this - these are people who are not scared of the bond market. The fear that governments seem to have is that failure to signal caution will lead to loss of confidence in the market, which will drive yields up, which will generate fear in the market and then render governments unable to raise money in the market. A this point, that would be that - collapse - there is a financing gap and until the structural elements of deficits are removed governments need to be very, very, very wary.