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A while ago we saw the French have their affair with the ECB, trashing their currency, their gilts, and in all probability their economy in the process.

Well a year's a long time in politics, and take a look what the heir-elect has been saying this week...


Oct. 14 (Bloomberg) -- Bundesbank President Axel Weber said China’s trade suplus is partly due to its “intervention in foreign exchange markets.” Weber said Germany’s trade surplus is mainly due to the quality and competitiveness of the country’s products. He was speaking in Berlin.


“A temporary financial support for member states should remain an option at best used only if there’s a clear, considerable contagion risk for the rest of the currency union and if, secondly, the use is tied to strict and painful conditions,” Weber said at an event in Berlin today. Funds should be raised by individual member nations rather than through a joint measure such as Eurobonds, he said.


“Measures for crisis management need to be tailored in a way that entails as little as possible distortion of incentives” for member states, Weber said. “That’s why it’s indispensable to credibly anchor the no-bailout principle.”


Weber, who is also head of Germany’s Bundesbank, called for a system of “automatic sanctions” for countries breaching the region’s budget rules. It’s important not only to monitor countries’ shortfalls but also their debt, he said. His Luxembourg colleague Yves Mersch said in London today that he would favor “more automaticity” for sanctions and that governments’ capacity to plead “exceptional circumstances” to avoid penalties should be curtailed.


Weber’s comments come two days after he said the ECB’s purchases of government bonds “should now be phased out permanently” and that the risk of exiting too late is greater than the danger of withdrawing measures too early. The ECB started buying bonds in May to help restore confidence.

“In the current situation, which is marked by uncertainty, a credible consolidation can serve as an anchor,” Weber said today. “A continuous expansive financial policy for countries with massive household problems is” no longer an option.

I wonder what the SNB will do when this fellow turns the firehose into a vacuum pump - it's easy to take liquidity, when someone else is providing it.

Adding liquidity (again, as before remember the relative sizes of things) when another is taking it on the other hand is a whole nother story.

It'll be interesting to see how the sands shift in the next twelve months - the ECB will want to have an orderly transition, and Weber has certainly just polarised the debate.

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Its true.

If a financial entity runsout of means of exchange, due to a "shortage", then it should expire...clearly "not enough to go round " really means, too many taking a slice.

reducing the slice takers would quickly alleviate the problem, while at the same time preserving savings value.

People overstretched on their promises to deliver will fail and suck their just desserts....NADA.

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the use is tied to strict and painful conditions,

There's the German national and cultural psyche right there.

So, are you saying there will be a sudden rush out of the swissie back into the EUSSRO if he gets his way? (I'm a simpleton - spell it out for us simpletons)

edit: speak and spell failure

Edited by Frank Sidebottom
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Oct. 14 (Bloomberg) -- Bundesbank President Axel Weber said China’s trade suplus is partly due to its “intervention in foreign exchange markets currency peg.” Weber said Germany’s trade surplus is mainly due to the quality and competitiveness of the country’s products our currency peg but i'll give you some other ******** reason so you can point your finger solely at china. He was speaking in Berlin.

edited for truthfullness.

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  • 420 Brexit, House prices and Summer 2020

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