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The IMF, Lagarde and QE

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The lady has spoken.

Christine Lagarde of the International Monetary Fund has told the European Central Bank that they need to consider Quantitative Easing if inflation continues to remain low, which it will. She stated: “If inflation was to remain stubbornly low, then we would certainly hope that the ECB would take quantitative easing measures by way of purchasing of sovereign bonds”.

Apparently Lagarde’s version of ‘stubborn’ is something that persists despite taking measures to boost otherwise. In other words, is this the last resort of the ECB and the IMF? Is there nothing else to do apart from print the money and inject it into the financial markets to over-inflate them as the US has done with the Federal Reserve’s money being thrown from the helicopters?

So, prepare yourself for the hefty buzzing noises emanating from the cellars of the ECB. Mario Draghi will be starting them there printing presses rolling just as soon as he can. The French can start liking Europe again and stop hating their President, Mr. Flabby François Hollande. The Brits can carry on with their housing boom and not fear the collapse of their bubble (just quite yet). The rich can get richer and governments can hide the fact that they aren’t creating jobs for anyone but themselves and the boys that belong to their clubs. After all it’s all about the stock market increasing, isn’t it?

Has inflation remained stubbornly low? Despite the unprecedented decision of Mario Draghi to impose negative interest rates on banks depositing money at the ECB, there is going to be little effect on prices. The economic recovery in Europe is flagging to say the least. Europe has got the big economic droop to deal with.

• Never before has any central bank put the rate on its deposit facility for banks at -0.10%. Interest rates were also cut at the June policy meeting from 0.25% to 0.15%
• Consumer prices saw an increase of only 0.5% in May (year-on-year) and that was a fall from April’s 0.7%
• Whatever is happening in the Eurozone, that’s way below the desired target of the ECB (2%).

Lagarde was asked whether she believed that governments would become complacent regarding structural reforms after these measures. She stated: “They all seem convinced that they have to pursue structural reforms, support demand by good solid monetary policy, and continue the fiscal consolidation path they have agreed”. Optimism is a sign of virtue, Ms. Lagarde.

• But, the problems still remain. Jobs aren’t being created. 
• Both sovereign and corporate debts are still there. 
• Geopolitical tensions are just around the corner, if not already on the EU’s doorstep. 
• Who’s going to invest while those problems persist?
• The UK government borrowing has just been announced to have increased in May by £13.3 billion
• That was way over what the City had forecasted. Tax receipts are down in the UK and the budget deficit is not being reduced.

According to the IMF, Quantitative Easing “would boost confidence, improve corporate and household balance sheets, and stimulate bank lending”. Of course, we all saw the overt signs of stimulation in bank lending and increased confidence as well as corporate and households raking it in when the US’s Federal reserve di the money-printing thing for years. The signs are so obvious they are just impossible to see.

This is not the first time that the IMF has told the ECB to pull the punches and become more aggressive in its decisions. IMF officials have on many occasions told the ECB to start a US-style bond-purchasing program.

But, hang on a moment! Isn’t that against the statutes of the European Central Bank? Doesn’t the ECB have a clause saying that it simply can’t provide monetary finance to governments? Oh, well, never mind. Since when did any bank, central or otherwise, play by the rules. The governments put the people there into power, so they can certainly return the favor, can’t they?

Remember when all is said and done that 60% of the trades done on the stock market every single day are just for the wealthiest 5% of the world. Yes, the 95% of the other poor devils that think they are controlling the financial markets through their buying and selling of shares have absolutely no idea. Christine Lagarde’s advice on the benefits of Quantitative Easing can only be of major benefit to the 5%. There’s really no need to wonder why the rich have got richer around the world.

Originally posted: The IMF, Lagarde and QE

 

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Tue, 06/24/2014 - 10:49 | 4889262 Ghordius
Ghordius's picture

"Christine Lagarde of the International Monetary Fund has told the European Central Bank that they need to consider Quantitative Easing if inflation continues to remain low, which it will. She stated: “If inflation was to remain stubbornly low, then we would certainly hope that the ECB would take quantitative easing measures by way of purchasing of sovereign bonds”."

again:

... need to consider ...

and

... we would certainly hope ...

 

does this sound like ECB QE? or like cheap IMF talk?

-----

folks, there is a war going on at the IMF. and it's all frigging members on one side and the US Congress on the other side. it's about the IMF shares, and it's way more important than this "hope for QE" from Lagarde

Tue, 06/24/2014 - 10:07 | 4889087 moneybots
moneybots's picture

France said 60% of the debt is illegal.  That sounds rather deflationary.

Tue, 06/24/2014 - 09:56 | 4889042 moneybots
moneybots's picture

"Christine Lagarde of the International Monetary Fund has told the European Central Bank that they need to consider Quantitative Easing if inflation continues to remain low, which it will"

 

QE JUST CREATES MORE DEBT. 

Why does Lagarde want to add to a debt bubble, when 100% of bubbles burst and deflate?  QE just digs a deeper hole, which just creates a bigger debt crisis.

Tue, 06/24/2014 - 09:35 | 4888947 JRobby
JRobby's picture

She came over? No, she is one of them. She finally found a swimming costume that fits correctly?

 

Tue, 06/24/2014 - 09:11 | 4888818 Racer
Racer's picture

15m

PLOSSER SAYS FED `NOT VERY GOOD AT FORECASTING INFLATION'

 

The only thing the Fraud, er FED is good at is, is enriching the wealthy!

Tue, 06/24/2014 - 10:04 | 4889074 moneybots
moneybots's picture

The S&P 500 has inflated about 200% since March, 2009.

Tue, 06/24/2014 - 08:57 | 4888776 marathonman
marathonman's picture

So I should buy European stocks on the expectation that the ECB will start a QE program?  Is that what the orange lady just told me?

Tue, 06/24/2014 - 08:56 | 4888773 JailBanksters
JailBanksters's picture

Wasn't it Largarde that said the EU needs to stop printing euros a while ago. And now she saying the EU needs to print more Euros.

Do these people actually have any Idea about what they are saying or what they are doing. It's as if they are using a Magic 8 Ball to decide what to do next.

 

 

Tue, 06/24/2014 - 09:55 | 4889035 Vendetta
Vendetta's picture

Well they are sucking in 8-balls of monetary crack every single day

Tue, 06/24/2014 - 08:01 | 4888642 Racer
Racer's picture

If inflation was to remain stubbornly low"

WTF?

Translation: If our stealth theft of people's money is not working we must do something about it so we can go on stealing

Tue, 06/24/2014 - 06:46 | 4888566 TNTARG
TNTARG's picture

Euro Challenge 2014!

What is the Euro Challenge?

The Euro Challenge is an exciting educational opportunity for high school students to learn about the European Union (EU) and the euro. Student teams of three to five students are asked to make presentations answering specific questions about the European economy and the single currency, the euro. They are also asked to pick one member country of the “euro area” (the 18 EU member countries that have adopted the euro so far), to examine an economic problem at the country level, and to identify policies for responding to that problem.

In 2014, its ninth year, the Euro Challenge will continue to expand nationally, with more than 100 teams from various regions in the United States expected to compete for monetary awards generously provided by The Moody’s Foundation.

The Euro Challenge is a program launched by the Delegation of the European Union to the United States in partnership with The Moody’s Foundation and with the Federal Reserve Bank of New York serving as program advisor. The program is supported by Credit Suisse, the University of North Carolina, Florida International University, the University of Pittsburgh, the University of Illinois, the University of Texas at Austin, Rutgers University, George Washington University, Indiana University, the University of Wisconsin, the World Affairs Council of Pittsburgh, the DC World Affairs Council, the Federal Reserve Bank of Cleveland (Pittsburgh Branch), the Federal Reserve Bank of Boston, and the Federal Reserve Bank of Chicago and Detroit Branch.

http://www.euro-challenge.org/wordpress/about/#what-is-the-euro-challenge

Tue, 06/24/2014 - 05:55 | 4888520 no more banksters
no more banksters's picture

“If inflation was to remain stubbornly low, then we would certainly hope that the ECB would take quantitative easing measures by way of purchasing of sovereign bonds”.

As predicted 2 years ago. Here is the plan:

"... the ECB becomes a corresponding Fed in the European area, “serving” the problematic economies that are excluded from the bond markets, through the print of new money. Therefore, the problematic economies will be loaded with more and more debt which the ECB, i.e. the largest private European banks will hold."

More:

http://failedevolution.blogspot.gr/2012/09/lea-jacta-est-by-emperor-drag...

Tue, 06/24/2014 - 00:50 | 4888317 starman
starman's picture

tick toc fucking bankers! When the IMF want to monetize world currencies something is up! watch out below!

Mon, 06/23/2014 - 23:53 | 4888220 Bemused Observer
Bemused Observer's picture

Holy Christ! Inflation is "stubbornly low" because people stubbornly don't have any money to spend!
What part of that don't these dumb fucks understand! It doesn't matter HOW much fake money you throw at it, you dumb bitch, it will NOT grow because it is dead...DEAD! You fucking KILLED it. There is no way to get around the fact that taking ALL the money for yourselves doesn't leave enough to keep your damned economy growing so you can keep that money.
How do you say conundrum in French? How do you say Fuck You in French?

Tue, 06/24/2014 - 05:56 | 4888521 thestarl
thestarl's picture

And you can't print cheap oil?

Tue, 06/24/2014 - 01:04 | 4888245 blindman
blindman's picture

she is become bondzilla, see the keiser link above.
consumer debt has limits that are not part of their
un "economic" model or anti-"money" system. either they
are complete idiots or they are evil, duplicitous broad
daylight thieves, in either case they need to be incarcerated
and deloused - sterilized. in their model the economy depends on
consumer spending and they refuse to pay for labor or services
and refuse to lend into the consumer economy. then they
print more "money" and steal it and wonder what went wrong.
after all, they are just clowns robbing treasuries.

Mon, 06/23/2014 - 23:03 | 4888111 blindman
blindman's picture

[KR617] Keiser Report: Rise of Bondzilla
Posted on June 21, 2014 by Stacy Herbert —
.
Read more at http://www.maxkeiser.com/#2SqozO5PgtQeS7OL.99
.
http://www.maxkeiser.com/

Mon, 06/23/2014 - 22:11 | 4887988 Baby Eating Dingo22
Baby Eating Dingo22's picture

The nicest thing about QE is there's alway more to be had

Eat too many cookies and you get sick

Put a paperclip in an AC outlet and watch the sparks

Drive too far and you run out of gas

Poke your eye with a pointy stick and it hurts

Hit on 20 and you'll probably lose

But according to central banksters, QE is always available, it's limitless, has amazing powers to cure, never fails, and has no side effects or consequences.

Mon, 06/23/2014 - 21:45 | 4887917 delivered
delivered's picture

Japan has been doing it for years as well as the US more recently (over the past 3+ years). So why wouldn't the ECB join the crowd and start buying soverign debt directly with newly and freshly minted currency? Let's face the one fact most everyone on ZH clearly understands (but the balance of the population has no clue about). The one and only goal of the western CBs including the BOJ, the FED, the BOE, and the ECB are to bail out the bankrupt western governments. Period. End of story. They are throwing everything they have at the problem including direct buying of soverign debt (basically unheard of a decade ago outside of Japan), driving interest rates to historical lows and more recently, negative (again, unheard of as we are now in the twilight zone), and unleashing massive QE programs that go beyond the previously two mentioned steps and have basically reached a point of buying equities (to prop up markets). Honestly, where else can an insolvent entity, with negative cash flow, go to get a completely unsecured loan, with no covenants, no collateral, at an interest rate of less than 3% for ten years and 1% for five years. Why the CB's and their proxies of course as they have plenty of capital available help keep the ponzi going just a little longer.

What we are witnessing is history in the making as the bankrupt West desparately attempts to keep their economies and governments intact by using a coordinated QE strategy to provide the illusion that TPTB have control of the problem and have solved the underlying structural damage done from 40+ years of reckless policies and spending. But I give the IMF credit on one front. That is, at least the IMF understands that the only way out of this mess is either through massive defaults/deflation (eventually leading to hyper-inflation) or rapid inflation. The default/deflation scenario really scares the shit out of TPTB so inflation is going to be pursued at all costs now. The IMF knows this and is simply saying this by stating the ECB should start a direct QE program. But 2%, come-on that's a joke. What we really need is a good solid round of 6 to 8% inflation for 5 to 10 years to even come close to getting a handle on the soverign debt/spending issues.

Of course, it's probably too late anyhow as with the BRICS and other countries beginning to wise-up to the West's tactics, the race (or more appropriately, charade) may already well be over as while the West throws everything but the kitchen sink at the problem from a QE perspective, the East is alligning their resources in real assets for the end game. We've had the Great Depression and the Great Recession. Just a matter of time now before with have the Great Reset. 

 

Mon, 06/23/2014 - 19:55 | 4887505 AdvancingTime
AdvancingTime's picture

Fact is the IMF is a tool of the Western developed countries that provide its funding. This means that when the IMF rubber stamps their policy it means very little and we should not be reassured.

The pool of money the IMF loans and redistributes around the world helps to stabilize countries if they are failing or economically unstable.  But many people do not understand who, and how they are funded. While the IMF exerts a fair amount of influence, it is political in nature and pushes the way the wind blows.

This bring up the issue and questions as to how muddled this system is. With a loud voice the IMF is overrated, it often uses only a small amount of money to make the very desperate march in line, at times this means not solving problems but helping to kick the can down the road. For more on the IMF see the article below.

http://brucewilds.blogspot.com/2013/04/imf-overrated-institution.html

Mon, 06/23/2014 - 20:24 | 4887650 logicalman
logicalman's picture

All finacial 'tools' are, in fact, finacial weapons used by the parasitic class against the rest of humanity.

FIFY

Tue, 06/24/2014 - 09:39 | 4888960 JRobby
JRobby's picture

+ whatever comes after a 999 trillion

REVOLT!

Tue, 06/24/2014 - 08:00 | 4888639 AdvancingTime
AdvancingTime's picture

Well said!

Mon, 06/23/2014 - 19:31 | 4887432 RaceToTheBottom
RaceToTheBottom's picture

Oh no, Gold and Silver will drop

Mon, 06/23/2014 - 19:33 | 4887441 logicalman
logicalman's picture

Paper Ag & Au might.

Mon, 06/23/2014 - 19:48 | 4887496 RaceToTheBottom
RaceToTheBottom's picture

Believe me, I am watching Singapore for the separation

Mon, 06/23/2014 - 19:20 | 4887395 disabledvet
disabledvet's picture

Textbook "Japaneasy." Interest rates are still not low enough..."they need to go lower."

That's easy! "Send all your gold to 'merica!"

And indeed Germany now has.

This is being done with nothing more than Long Range Surveillance Units btw...not "the two Erichs" (Von Monstein and Raeder) and "the biggest armed formations ever seen in human history."

Laser rangefinders, thermal imaging, GPS coordinates and "a smart bomb."

What was that sniper's name in Vietnam who literally had a feather in his cap?

How the hell can an entire Infantry Divsion not see that?

Mon, 06/23/2014 - 19:18 | 4887389 logicalman
logicalman's picture

Inflation is a back door tax.

Taxation is theft........

TPTB are telling you, flat out, that they intend to steal from you.

Wake the fuck up!

Mon, 06/23/2014 - 20:25 | 4887656 litemine
litemine's picture

But, the problems still remain. Jobs aren’t being created

That is the Statement.    But the Party Line is "Give the control to the Rich and the Bankers".......

Bring on the NAIL GUN SALES>

Tue, 06/24/2014 - 09:41 | 4888964 JRobby
JRobby's picture

Stun Guns

Lighter Fluid

Zippos

 

They burned witches didn't they?

Mon, 06/23/2014 - 19:59 | 4887553 AdvancingTime
AdvancingTime's picture

Regardless of what you name it the "Federal Reserve Nightmare" or the "Yellen conundrum", the box Ben Bernanke made when he painted both himself and the Federal Reserve in a corner remains. Bernanke has by passing the chairmanship to Yellen escaped from the QE trap but left the rest of us fully in its grasp.

With a policy of loose and cheap money  and an inflation target of just 2% the Federal Reserve  continues to please those gambling that not fighting the Fed guarantees profits. As many Americans are forced to pay higher food, gasoline, and health insurance premiums, I wish someone would let the Fed know we are already there. Any thought that inflation is not higher has come from the false illusion brought from lower payments on things like auto loans and mortgages, this is a one off and will not continue. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/06/exit-strategy-from-qe-remains-elu...

 

Mon, 06/23/2014 - 19:15 | 4887379 logicalman
logicalman's picture

Where the fuck do these people get the idea they have the right to fuck over humanity for their own ends?

I should put that in all caps and bold, but I'm trying to be considerate of others.

Mon, 06/23/2014 - 21:44 | 4887914 teslaberry
teslaberry's picture

because they can. 

it is easier to destroy than to build. once something is already built, the threat of destroying it is perhaps the strongest card in the deck---until it's destroyed. than that card becomes all but worthless and the muder fuck kill card carried by the military and warlords becomes the strong card.

Mon, 06/23/2014 - 19:13 | 4887374 Sirius Wonderblast
Sirius Wonderblast's picture

So the fragrant if somewhat orange one has effectively said, "To hell with the law, and  every Euro treaty many of which I was instrumental in helping to create - France is up shit street so run the presses". Even though there are real reasons why even Draghi has not taken that final, fatal, step.

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