
Because governments own the bonds means that they are unlikely to ever sell them. However, by purchasing the entire market, don't they essentially drain the liquidity right out of it? Seems to me, all you need is a third party panicking & 1 trade sets the price of a market.. If people decide that the bonds are worthless & Japanaese, European, Italian, Spanish, American Debt is only worth taking the risk for a much higher yield. I think that rates could theoretically spike like crazy & destroy highly leveraged banks/speculators who use these bonds as bedrock collateral for $trillions of derivatives bets in all markets..