BOJ introduces Yield Curve Control
On January 29, 2016, the Bank of Japan announced a policy of Yield Curve Control (YCC) — committing to hold the 10-year Japanese Government Bond yield at approximately zero percent through unlimited bond purchases. Rather than specifying a quantity of bonds to buy (QE), the BOJ specified a price (yield) and bought whatever quantity was required to hold it. YCC is the direct lineage of John Law's 1720 Banque Royale promise to support share prices: a commitment to make whatever monetary expansion is necessary to hold a target price. The BOJ abandoned strict YCC in 2024 after it had required purchases of roughly 100 trillion yen across single months.
YCC is the most explicit form of 'whatever it takes' monetary policy yet tried. It eliminates the bond market's role in price discovery entirely; the price is whatever the BOJ decides it is. The end-game of YCC is either a currency devaluation (the yen fell roughly 40 percent against the dollar during the YCC period) or abandonment of the policy.
07 · Stealth Printing
In November 2008, the Federal Reserve launched Quantitative Easing — the purchase of long-dated Treasury and mortgage securities with newly-created reserves. It was, mechanically, money-printing. Politically, it was called 'unconventional monetary policy.' The innovation was not the printing; central banks had been doing that for three centuries. The innovation was that the printing became invisible to most people — the new money entered the financial system through bond purchases rather than fiscal deficits, and its effects showed up in asset prices rather than in consumer goods. Alongside QE, central banks have developed a toolkit of yield-curve control, reverse repo operations, currency swap lines, and measurement adjustments to the inflation indices themselves. The era's thesis: debasement still happens; it's just harder to see.
Read the full era →- Nov 25, 2008Federal Reserve launches QE1
- Sep 21, 2011Operation Twist — maturity manipulation
- Apr 4, 2013Bank of Japan launches QQE
- Mar 23, 2020Fed announces 'unlimited' QE for COVID
- 1996 — 2023CPI hedonic adjustments and substitution
- 2018 — presentTurkish lira collapse — rate cuts into inflation
- Sep 23 — Oct 14, 2022UK gilt market crisis
- 2023 — 2025Central Bank Digital Currency pilots