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Ecb Bows To German Veto On Mass Bond Purchases

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http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8177568/ECB-bows-to-German-veto-on-mass-bond-purchases.html

Jean-Claude Trichet, the ECB's president, said emergency lending support for eurozone banks would be extended until at least April next year, citing "acute tensions" in the market.

The delay removes the risk that Frankurt might soon pull away the prop holding up the Irish and Greek banking systems, as well as the Spanish cajas – or savings banks – and the sovereign states behind them. Traders say the ECB intervened directly in the weakest bond markets on Thursday to drive down yields and calm nerves.

However, Mr Trichet said there had been no decision to step up purchases of peripheral bonds to a whole new level – the so-called "nuclear option" – despite the potentially dangerous rise in Spanish, Italian, Belgian and even French yields over the past three weeks.

....

Rainer Bruderle, the German economy minister, spelled out Berlin's objections on Thursday just hours before the ECB meeting, insisting that "the permanent printing of money is not a solution".

A chorus of influential voices in Germany has warned that any attempt by the ECB to prop up Club Med with loose money would be a grave error, undermining German political support for monetary union.

"It would be fatal if the ECB was to squander its credibility," said Klaus Zimmerman, head of the DIW German Economic Research Institute. He said the bank is the last bastion of credibility after the serial breach of EU fiscal and debt rules.

"Broader purchases of the distressed eurozone debt would calm speculation for a short time, but would just invite risk-taking by investors in general," he said.

...

Separately, key figures from the major parties on the Bundestag's finance committee renewed calls for debt restructuring for Greece, Ireland and Portugal, with "haircuts" for creditors.

AEP in the Telegraph.

No bond buying from the ECB.

Meanwhile....

http://uk.reuters.com/article/idUKTRE6AO1NY20101202

The European Central Bank resisted pressure on Thursday to commit to a major bond-buying programme to contain the euro zone debt crisis, but traders said the ECB had been quietly buying bonds anyway.

ECB President Jean-Claude Trichet said the bank had decided at its monthly policy meeting to keep interest rates on hold and it extended its liquidity safety net to support vulnerable euro zone banks.

He made no mention of increasing the ECB's government bond buying programme, despite calls to do so after an 85 billion euro (70.9 billion pounds) EU-IMF rescue of Ireland failed to dispel fears that Portugal or Spain may need a bailout.

"I say we are constantly alert. We are constantly looking at the situation of the markets," Trichet told a news conference.

But referring to a bond-buying policy that the ECB started after Greece was bailed out in May, he said: "The Securities Market Programme (SMP) is ongoing, I repeat -- ongoing ... I won't comment on the observations of market participants."

Looks like the EU project has hit a bit of a problem.

The PIIGS are bankrupt and Germany is unwilling to help.

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Do you still believe the yellow stuff will start dropping soon.?

im pretty sure its already started dropping in USD terms, if correct i expect the gold bugs to hold onto the idea that it is just "manipulation" down to about 1K at which point there might be a bit of capitulation, i dont think there will be many still holding when it turns up again, alternatively we could be seeing the beginning of hyperwypererinflationation and im totally wrong and the gold bugs are right

Edited by Tamara De Lempicka

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"It would be fatal if the ECB was to squander its credibility..

More squandering of non-existent credibility.

Never mind borrow some from Merv.

Ooops he hasn't got any left either.

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all i know is i have always trusted my analysis of the markets since the mid 90s and they have served me well despite giving me diametric signals to the news, so i will stick with that until proven wrong, but if risk reenters the market then the USD will rocket, because thats what most of the debt is held against, if risk remains a non event then the usd is fcked, my analysis right or wrong told me to start accumulating USD a month or so ago from the relative safehavens of gold and chf

I agree but i also may be wrong on commodities

I have a years salary in twenty pound notes under my bed, i am a salarybug.........................................

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I really don't understand this thread, in particular 'finally the bankruptcies are being faced up to' (unless that is sarcastic). We need the Germans to save us (i.e. the non-property-owning cash holders), but they won't because the ECB are lying to everyone.

As far as I see it, this is where the situation becomes crystal clear; central banks say that they will not do massive QE, while in the midst of making that statement simultaneously buying bonds that no one else will touch.

For 2 days stock markets have rocketed while the fundamentals in the economy are truly awful, all on the back of rumours of bond purchases. Then the ECB feel that they can't disappoint 'the market' so they actually carry out the rumoured purchases while actively lying about it.

This is it. Four years ago, when I started reading this blog, I thought the people who predicted this were total nutters. Even now, when I mention what is going on (I try not to, as people think I'm a weirdo for doing so, but I can't help it after a few beers, as now) people don't think it is credible, but here we are.

There is no point working, saving, or starting a productive business. These things are for mugs.

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I really don't understand this thread, in particular 'finally the bankruptcies are being faced up to' (unless that is sarcastic). We need the Germans to save us (i.e. the non-property-owning cash holders), but they won't because the ECB are lying to everyone.

As far as I see it, this is where the situation becomes crystal clear; central banks say that they will not do massive QE, while in the midst of making that statement simultaneously buying bonds that no one else will touch.

For 2 days stock markets have rocketed while the fundamentals in the economy are truly awful, all on the back of rumours of bond purchases. Then the ECB feel that they can't disappoint 'the market' so they actually carry out the rumoured purchases while actively lying about it.

This is it. Four years ago, when I started reading this blog, I thought the people who predicted this were total nutters. Even now, when I mention what is going on (I try not to, as people think I'm a weirdo for doing so, but I can't help it after a few beers, as now) people don't think it is credible, but here we are.

There is no point working, saving, or starting a productive business. These things are for mugs.

There is no point working, saving, or starting a productive business. These things are for mugs.

I symphathise, the whole debt PONZI is at................................ There is no point working, saving, or starting a productive business. These things are for mugs.

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Why hasn't gold gone through the roof in the past couple of days?

People are scared to place their money into it. Its non productive. It is a store of wealth for sure (before anyone tries explaining that idea to me) but it has now gone from not just that to a punt, and another pyramid scheme for many. There is fear in placing wealth into it with gold values as they are now.

So now there are so many types of perceptions about gold as to why it is increasing in value, that it is fast becoming hysterical. People are afraid if being wiped out and to my mind I have gone from believing it to be a nice earner to something that will blow up in peoples faces within a year.

ps havent you seen.....its gone through the roof actually over the last decade. Now it may be like housing.....its wait and see time.

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Why did you delete it? Have you changed your mind?

By the way Panda quoted it before you deleted it.

all i know is i have always trusted my analysis of the markets since the mid 90s and they have served me well despite giving me diametric signals to the news, so i will stick with that until proven wrong, but if risk reenters the market then the USD will rocket, because thats what most of the debt is held against, if risk remains a non event then the usd is fcked, my analysis right or wrong told me to start accumulating USD a month or so ago from the relative safehavens of gold and chf

Great post...............

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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