Livewire published this excerpt from Zero Hedge back in December, yet it seems more relevant today then back then..
Livewire published this excerpt from Zero Hedge back in December, yet it seems more relevant today then back then... What happened the last time a major central bank tapered QE? After having followed a zero interest rate policy strategy and facing a further deteriorating economy in an environment of falling prices (deflation), the Bank of Japan (BOJ) announced the introduction of QE on 19 March 2001 and kept it in place until 9 March 2006. The BOJ chose for a very orderly and gradual unwinding of its government securities portfolio, by continuing its regular purchases of these securities (i.e a taper and not sale). The market rejoiced at the normalization for a week or 2... before dropping 24% in the following 2 months. See all the graphs here... (VIEW LINK)