Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Government bonds are not debt instruments, they're monetary policy instruments (in the words of JakeS).

The Central Bank needs a sufficient stock of government bonds to be able to set rates.

Limiting the amount of government debt outstanding to (say) 60% GDP or the rate of issue to (say) 3% per year works is bonkers. In normal times, it doesn't much matter.

But what FT Alphaville is saying is that the Bundesbank effectively needs a lot more Bunds in hand than the Federal Government can issue.

(Others may interpret this differently)

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Wed Nov 23rd, 2011 at 10:03:02 AM EST
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