While ECB-chairman Mario Draghi firmly continues buying up bonds (but for now decided to keep rates where they are and not increase the pool of eligible assets by relaxing the boundaries of its purchase program), an important question arises. Can a central bank go bankrupt? Central banks can certainly become insolvent or, in other words, have a negative equity with the value of their liabilities surpassing the value of their assets. Better yet, it is very likely that the coming years central

Central banks appear to compete over having the largest balance sheet in the world. Past month, the European Central Bank (ECB) had the dubious honor of breaking its own previous high. The ECB crossed the €3,130 billion-mark in total assets. In June alone, the central bank grew its balance sheet another €53 billion.

But the ECB is running into its limits. Last year, I raised the possibility that the ECB’s stimulus program might end prematurely. There are simply not enough eligible

The very day the previous bull market in gold came to a halt, the bull market in fixed income began. Thirty-six summers later this bull market is coming to its climax. But no one seems to be aware of the speculative fever on the bond market. This week even the longest dated Swiss bond (brace yourself: this bond matures in 2064) went below zero. The entire Swiss yield curve is negative now. Yet, curiously, we tend to associate speculative manias almost automatically with stocks and commodities. This is how big the bubble in sovereign bonds is and these are the consequences everyone conveniently ignores.