Sunday, November 8, 2009
Boiling the frog
Debt Management Office at a Treasury Select Committee transcript. The DMO is at pains to show that they will do anything to maintain a stable and gradually adjusting increase in yields. Presumably because any panic or even a sniff of it will take the form of an "ipso facto permanent" jump in yields i.e. yields jump unnecessarily from panic, government position looks real shaky due to higher servicing costs, shaky governments have to up yields on debt and so forth. A collapse in confidence.