brother disco stu's shocker - tuesday, page-46

Hmmm simple hey. Haha. Thanks for the time and effort - I really appreciate it.

My understanding is that these bonds can clog up the balance sheet and prevent residential and business lending as banks need to meet capital adequacy ratios.

But QE should drive down yields as the main or extra buyer (ECB) is demanding more bonds. So this frees up lending for the banks as they can lend out more creating more credit and increasing the "total money supply" (if the banks are willing to lend).

QE is basically writing off debts (at a profit to the central bank) whilst stealing from any holder of the central banks currency.