Albert Edwards of Societe General. He has a point and I will add that the monetary mix in the UK is much better after the crisis than it was before. Prior, it was planning to use QT more than rate hikes to tighten. Given most UK mortgages are fixed rate and priced off the bond curve this was always high-risk. Now the BOE is raising the cash rate while using QE to control the curve. Is this, in fact, a kind of deflationary QE? It certainly can be and is an example of where many more governments may end up before this shock is over.
Even as far away as China. If capital outflow breaks the CNY dirty peg and yields start to rise, China can adopt this approach to prevent a rout in its bond market even as it let the CNY go.
There is no reason why QE cannot peg a curve above zero.
