144 – Peter Stella on Debt, Safe Assets, and Central Bank Operations
Macro Musings with David Beckworth
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The Bifurcated Market of Domestic Debt
The central bank in a crisis created the market so to speak. And that's not a good time to be issuing debt right when the whole world is falling apart earring. So basically as you got out of that problem, treasuries started issuing domestic debt but there was an incumbent in the market. It was a central bank. In fact, if you look at Chile today, if you consider a central bank debt as sovereign debt, which I do, basically 50% of the domestic sovereign debt is obligation of the treasury.
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