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Napanee, Ontario | Reality is that the market never used to be like this.
The central bank did not buy bonds directly out of the open market up until the last 6 years.
Here is the definition of fair market value:
"the highest price, expressed in terms of money or money’s worth, obtainable in an open and unrestricted market between knowledgeable, informed and prudent parties acting at arm’s length, neither party being under compulsion to transact"
I don't know what else to say at this point except that you might need to get a better understanding of the way price discovery is supposed to happen, and the elements that contribute to it. There is no true price discovery in the bond markets - the central banks are the biggest force, as you say, and they care not about getting the best price.
There is a price, but it is not discovered by wisdom of ROI's. It is set by a player that cares not about that element. Which renders that market incapable of real price discovery.
Edited by OldMcdonald 10/31/2014 12:23
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The 4.5 trillion dollar balance sheet. Continued QE
