The better headline for this story is “If Bonds Can’t Go Down Stocks Can’t Either.”

The U.S. Treasury bond market has suddenly ground to a halt, puzzling traders, investors, and hedge fund managers alike. Last week, the yield on the 10-year Treasury bond  traded as low at 2.85%. That is a miniscule 25 basis points higher than they posted nearly two years ago in November 2016. This is despite the U.S. economy delivering a red hot 4.1% Q2 GDP growth rate, a massive tax cut, a huge deregulation push, and corporate profits at all-time highs. After the past three years, S&P 500 earnings have soared from $120 to an expected $170.

If I blindfolded any professional money manager, told him the above and asked him where the 10-year Treasury yield should be, most would come in at around the 5% level. So what gives? I have put a great deal of thought into this and the answer can be distilled down to two letters: QE.

Global quantitative easing has created about $50 trillion in new money over the past 10 years. It has not been spent, it hasn’t disappeared, nor has it gone to money heaven. It is still around. The U.S. Federal Reserve, the first to start QE in November 2008, ended it in October 2014. From start to finish it created $4.5 trillion in new money. Over the past four years this has been wound down to $4.2 trillion by letting debt on its balance sheet mature.

Japan actually began its QE program in 2001, long before anyone else, to deal with the aftermath of the 1990 Japanese stock market crash and a massive demographic headwind (they’re not making Japanese anymore). Some 17 years later, the Japanese government now owns virtually all of the debt in the country. When you hear about Japan’s prodigious 240% debt to GDP ratio, it’s nonsense. Net out government holdings and there is no national debt in Japan at all.

After the 2008 crash, the Japanese government expended its QE to include equities as well. As a result, the government is now the largest single buyer of stocks there. As a result, the Nikkei Average has risen by 233% since the 2009 bottom despite a miserable economic performance, and the yield on 10-year JGB’s stand at a lowly 0.10%. The European Central Bank got into the QE game very late, not until 2015, and its program continues anew, although at half its peak rate. The ECB has indicated it won’t stop creating new money until 2019.