You Down With OMT?
If you're confused about the European Central Bank's plan to save Europe, you're not alone. There seems to be a contradiction within the plan: how does one reconcile the promise of unlimited purchases with the concept of sterilization?
Everyone understands the meaning of unlimited purchases, but it might be helpful to explain sterilized vs. unsterilized buying. In theory, a central bank can simply print money and use it to buy bonds. There is no limit to the amount that could be printed and it could continue until every last bond is purchased. If there is no offset to the money being spent, the bond purchases are described as unsterilized....409 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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