Read the rest at Zero Hedge
ECB Governing Council member Yves Mersch said that monetizing government debts "is tantamount to inflation" and "not feasible." To use inflation to lower the fiscal burden "would reduce incentives for governments" to tackle their debt burdens and "would raise the risks of even higher future inflation and greater output volatility. Uncontrollable wage-price spirals would be likely." Mersch said in a speech in Frankfurt today. He also added that you can not make the ECB as a "lender of last resort for governments" and that governments must live up to own responsibilities.
ECB Member Tells The Truth: Debt Monetization Is The Beginning Of The End
Europe faces a deflationary spiral and TPTB are worried about inflation? Crazy talk.
7 comments:
Another "wise man" who doesn't understand that the Quantity Theory of Money has four variables:
MV=PQ
So, Mr. Mersch... if "M" increases, does that necessarily mean that V and Q stay constant?
I have some 1 word sentences for Mr Franco German a-hole :
1. Japan
2. Argentina ( growth since 2001 )
3. MMT
4. Rascism ( those poor south countries )
5. deflation
Then I would suggest that when things get cheap in EU all the goof ball Americans will come over and by their land at dirt cheap prices.
We cann't have that now can we Yvesie
Why are the American's kicking California out of the Union ?
Illinois thereafter ?
The EU is not a union if they act this way.
Lets hope the Europeans lead the austerity charge. If they make a spectacle of it early enough, maybe our leaders will come to their senses and not follow them down the same hole. But the timing is not looking good :(
Canada is treading water, delaying plans to reduce the deficit.
Laura,
I don't think so. It's religion to most people. They look at all debt the same way.
Trouble is that Europe can take the rest of the world down with it. Remember Credit Anstalt.
These ECB idiots will be remembered for their ignorance and foolishness. It's true that the architects of the Euro are responsible for legally tying the ECB's hands when it comes to being lender of last resort, but it was the ECB that decided to raise interest rates both in 2008 and this year. They reversed course in each case after helping to crash their economies.
What jokes these people are. They can't even tell the difference between actual broad inflation and rising oil and food prices.
Post a Comment