Friday, March 27, 2009

That should do it! Party’s back on!

Europe fetches the monetary helicopters, at long last

Rejoice. After much pious posturing – and criminal wastage of time – the European Central Bank at last seems ready join the Anglo-Saxons, Japanese, Swiss, and Isrealis in printing money to fend off disaster.

Posted by flintster1994 @ 02:42 PM (1211 views)
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4 thoughts on “That should do it! Party’s back on!

  • Ho ho – a Greek banker trying to strongarm the ECB by suggesting publicly that ECB QE may be needed.

    For Greece, a devaluation is needed desperately, but for Germany, it would be political suicide to agree with an election due in a few months. And how do you sell it to the French?

    An then there’s the Dutchman, worrying about deflation. True, for the Netherlands it is a real risk, as the Dutch have little history of taking to the streets, and you probably could cut wages there without a riot.

    Ambrose is being a bit naive here..

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  • britishblue says:

    @Uncle Tom said Ambrose is being a little naive.

    Maybe, but maybe not. I have just come from Germany in the last couple of days. There is fear on the streets of mass unemployment and anger at their governments seemingly inability to do anything. Exporters are furious at the damage of the high Euro, which risks going higher as other countries QE.

    Yes there is the Germanic reluctance to bail out other EC members, but the dramatic plunge in manufacturing/ exports is starting to become an overwhelming issue and will become an election issue. The ordinary man on the German street is now realising that a high currency can be a death warrant to employment in a worldwide recession. If every other major country in the world undertakes QE the countries who don’t will see a rise in the value of their currency. We may start to see the argument that they (the ECB) have to QE to prevent other countries taking unfair advantage of the Eurozone and prevent an uncompetitive currency. I am not at all sure this would be a politically suicidal argument put in the context of the alternative of a Japan style slump.
    Most other countries in the EC are suffering horribly because of the high Euro and a change in German sentiment would tip the balance.

    I am with Ambrose on this one.

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  • General Congreve says:

    Wonderful news, another step closer to me cleaning up from this mess. I’ve been worried about the effects of a strong Euro remaining in the pack, but if the ECB get QE underway (and once it’s started it’ll be hard to stop Euro QE snowballing), we can be sure the Euro will go the same way as the Pound, Dollar, Swiss Franc etc. The name of the game is now competitive devaluation, which can only lead to the ultimate relegation of fiat currencies. For a few decades at least, until history is forgotten and the next bunch of idiots implement it again.

    Who do you trust? Gordon or Gold? Move straight to GO, do not stop, collect your 2 million pounds 🙂

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  • britishblue – Interesting – QE as a tool in competitive devaluation. The comments under the article make good arguments for opposing QE per se, but if everybody else is doing it……….

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