It is only a difficult time for politicians to be able to quantitatively release the NB permanently.

The Chamber of Deputies today discussed the introduction of the permanent possibility of implementing the so-called quantitative approval of the Czech National Bank. If pslun nvrh proel passed, she should NB this possibility beyond the horizon of this year. So far, it has only temporary, first until the end of this year, in stock emergency step from the spring spring, from the time of the peak coronavirov crisis.

In eskm context it is a concrete sign, e NB could permanently, even after in 2021, buy on the secondary market bonds government of R and long maturities, for example ten years, from practically all financial companies in R, ie from banks, pojioven, fond, stockbroker and others.

The House shall discuss the proposal symbolically at the time when the entry of the Czech Republic bond relatively noticeable rise. Today it’s been a decade bond vldy R attacks 1.9 percent, and is thus the highest since mid-May 2019. At that time, the Czech Republic was in full prosperity, while now it is going through an economic crisis caused by pandemic diseases covid-19.

In times of prosperity years rates, vetn tch na bonds, due to the positive reason for the prospect gave economic expansion, growth of economic potential and growth inflation for the sake of increasing economic activity. Thus, due to the prospect of such an expansion, which will bear the years, even for it, they are a certain protection against infiltration.

We do not have prosperity now. Rst input to vldnch bonds therefore, in addition to the prospect of soon recovered economy it thus includes unfavorable results inflation bez adekvtnho ekonomickho rstu. Takov inflation would result from the worldwide provision of massive fiscal injections to alleviate the economic impact of the pandemic. Vera American president Joe Biden confirmed with his signature his own envelope of budgets patent for about two trillion dollar. His bite is, for example, a pm payment of 1400 dollar per capita more than 85 percent of the American population, ie in a sense shazovn penz from a helicopter.

Ekonomov se pou, v jakm pomru je v souasnm rstu vnosu bond in R, USA and elsewhere, positive ingredients are mixed with the prospect of economic recovery after the pandemic, and in inflation without economic growth, the threat of so-called stagflation.

There is now no consensus among economists. In addition, the situation is complicated by geographical differences. European Union lag in speed vaccination not only for the often mentioned Israel i Britni, but so beyond the surrounding countries of Turkey or Morocco. A t za United stty. Investments from around the world thus avoided a rapid recovery in the US not in Europewhat positively contributes to the growth of income from bond first in the USA. At the same time, international investors are regrouping their portfolios in favor of US assets, which are due to the growth of annual returns. Dochz k pesunu capitu pes Atlantik, z Of Europe to the USA, or in the USA, this chapter could appreciate two and more sharply due to the two economic recovery.

Tm pdem ovem z Of Europe kapitl odtk, iz vldnch bond, their price thus decreases and the income increases. IN Europe therefore, especially in you, in the USA, there is an increase in income bond for that reason, stagflation. Ostatn nen nhodn, e European Central Bank not more active in recent days american central bank Fed signals a willingness to increase the pace of its now extreme monetary policy expansion, quantitative easing, to prevent further growth in input bond. Fed zatm declares, e for rstem entry in americkch bonds sees the main consequence of economic growth after the pandemic; European Central Bank not so positive

V dob pesunu chapter z Of Europe to the USA, with a particularly vulnerable European state economy, is very much that esk. esko is less an economy than you Poland and especially not the euro area. In itself, it is vulnerable. On the other hand, it still has a very good macroeconomic condition, including a relatively low level of indebtedness in relation to the gross domestic product, which are stabilizing factors.

Even these factors do not now prevent the difference in the input of eskho a nmeckho old bond with a ten-year maturity, it was practically the most in the last twelve years. Currently, this difference is about 2.2 percentage points, or input from nmeckho bond is negative, inc -0.3 percent (see chart).

This difference is now so noticeable not only because Nmecko, resp. The euro area represents not an economy in the economy, but because e European Central Bank operates a quantitative release, also buys you first and German bonds. It is nmeck vld umouje pjovat to the ground for a variable bad year esk salary at about two percent.

It’s not just a bag eurozone, where it is quantitatively released in various forms in the course of a number of years. Quantitative release v eurozn in fact, it is practically necessary that in the event of a collapse situation the land of another does not find itself kdla eurozny like Itlie i ecko.

The arrest of this week began quantitative easing Romania. Tamn centrln banka in an effort to stop the growth in Monday and to have bought on the secondary market vldn bonds for about 800 million crown. She made such a purchase for the first time since last August. Similar to Hungarian centrln banka this week it released the nkup volume limit bond with part maturity. He buys them within the framework of his own operated quantitative release. Free your hands during the operation, in turn, considers its quantitative release according to the days of information as follows Polish centrln banka.

In other words, the changing countries of the Central and Entrance European region take advantage of St. central bank to relieve them of debt, namely a year from it, respectively. hence input vldnch bond. The euro area customs is moving in a similar way. It is only a difficult time when even politicians realize that it is at their fingertips the bank’s central office, which can be quantitatively allowed at any time if necessary.

esk the republic is too small an economy to give away. You can have thousands and one objection to the quantitative release. But if everyone around him, I can’t get into a precarious situation due to the impossibility of realizing it. And especially at this time, when the public debt R enormous increase and will increase enormously. Politicians of any party t-shirt will therefore realize two or later that they should spit central bank Permanent powers to quantitative easing is not only in their sense of reducing the cost of debt, but that it is a necessity under the current set-up of the global financial system.

Quantitative release is like doping. When all the athletes around do, including the biggest fighters, it is nice to stay without doping, but that’s all. We will not win the lead. Instead, we end up deeper in the poraench field.

Luke Kovanda, Ph.D.

Nrodn ekonomick rada vldy (NERV)

Chief Economist, Trinity Bank

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