Even for investors motivated, the examination of the monetary policies implemented by central banks, hardly exciting reading in the heat of the summer. The impact on the confidence of the incredible adventures of the political leaders, no matter what side of the Atlantic, or even the news of the economic activity, stimulates more the curiosity of the investor in vacation. Yet, as often, the most visible is not necessarily the most important.
The revolution which will have an impact on the direction of the financial markets in the coming months, and probably the next few years, is not political. It is monetary. It has been almost twenty years ago was born the name then barbarian ” quantitative easing (QE) “. It was for the central banks, starting with the federal Reserve american, the Fed, venturing into the unknown to save the world economy from bankruptcy.
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The only lower interest rates, it was dramatic, since they are obviously not the height of the situation, the central banks engaged in the activity without previous purchases of government bonds on the market. These purchases raised the prices of bonds and the price of a bond moving in the opposite direction of interest rates, did decrease their performance.
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