This week has now seen two global banking entities admit that the monetary policies created by most central banks have not only failed, but are the root causes for what will become the next great financial crisis. On Friday, the IMF came out with a paper ceding that the Japanese central bank will very quickly run out of assets to purchase, meaning that their massive Quantitative Easing program will grind to a halt, and leaving Japan with no more arrows in their quiver to keep their asset bubbles afloat.
The Bank of Japan may need to reduce the pace of its bond purchases in a few years due to a shortage of sellers, said economists at the International Monetary Fund.
There is likely to be a “minimum” level of demand for Japanese government bonds from banks, pension funds, and insurance companies due to collateral needs, asset allocation targets, and asset-liability management requirements, said IMF economists Serkan Arslanalp and Dennis Botman.
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