Bundesbank Warns Draghi: "Monetary Policy... Is Too Loose"

Tyler Durden's picture

With EURUSD hardly budging, constantly disappointing economic data (from periphery to the core now), and central bank transmission mechanisms that are entirely clogged and useless for anything but stuffing the pockets of bloated bank balance-sheets with domestic sovereign debt, it is no wonder Germany's Bundesbank has said 'enough'. "If we pursued our own monetary policy... it would look different," explained Bundesbank chief Jens Weidmann. As Reuters reports, Weidmann noted that many savers in Germany were irritated by low interest rates and property prices were overvalued in some big city areas in Germany; implicitly threatening the ECB's chatter-box that "this phase of low interest rates, this phase of expansive monetary policy, should not last longer than is absolutely necessary."


As Reuters reports,

The European Central Bank's interest rates are too low for Germany, Bundesbank chief Jens Weidmann said on Saturday, adding that ECB monetary policy should remain expansive for no longer than absolutely necessary.


Speaking at a Bundesbank open day for the public, Weidmann noted that many savers in Germany were irritated by low interest rates but said these were aimed at supporting investment and consumption.




"It is clear that monetary policy, when seen from a German viewpoint, is too expansive for Germany, too loose," Weidmann told a crowd at the start of the open day. "If we pursued our own monetary policy, which we don't, it would look different."

Problems are coming...

Bundesbank Vice President Claudia Buch said property prices were overvalued in some big city areas in Germany by up to 20-25 percent, but that there was no acute risk of a price bubble forming.


Repeating a warning he has made previously about the risks of leaving policy loose for too long, Weidmann added: "This phase of low interest rates, this phase of expansive monetary policy, should not last longer than is absolutely necessary."

But - for now - we take our lumps for the greater good of the United States of Europe...

The ECB cut interest rates to record lows last month as part of a package of measures to breathe life into a sluggish euro zone economy, where inflation is running far below the central bank's target and there is a dearth of credit to smaller firms.


The German economy, Europe's largest, has been outperforming other countries in the bloc, however.


"But we are in a currency union," he said. "That means that in our monetary policy decisions, we must orientate ourselves to the whole currency union."

*  *  *
But, but, but everyone said Europe was fixed... It seems as we draw closer to that day of judgment (when AQR proves nothing and Draghi is froced to admit that TLTROs were useless), the "euro" will once again be in doubt as politicians seek an 'out' by blaming someone else. Given the recent election - it's clear the people are not amused.

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ebworthen's picture

In a sane world Germany would have it's Gold at home and be on the Deutschmark.

The Euro and the EU would be an idea only.

In a sane world.

BaBaBouy's picture

Shut The Fuck Up Until You Get ALL Your PHYSICAL GOLD Back To Munich!
Then You Can Pontificate All You Want...

BaBaBouy's picture

==> Where's Banzai7?

Taking Inventory Of His GOLD...

Leonardo Fibonacci2's picture

The Reich shall rise from the ashes.  Especially when a guy called Obammer (Black man) can't shoot baskets for shit!!!!  Most of all i can now understand why Adolf did not trust the western alliance.


Thomas's picture

Even worse, despite all the practice, Obama is a really shitty golfer. What somebody referred to (from a TV commercial) as "Shankopotomus". 

Leonardo Fibonacci2's picture

The Kenyan should go back to his Muslim homeland, Kenya!!!

Pinto Currency's picture



In a sane world, Germany would have gold money and not the fiat Deutschmark or Euro run by central planners.

max2205's picture

For God's sake.   At least somebody is pissed about low interest rates. ..fuck me


Wake up people

Son of Loki's picture

Hold on for a sec ... I'm trying to tune in the WNSA to hear Merkel's latest telephone conversation ....

Leonardo Fibonacci2's picture

If Hitler would have known that a Kenyan would run the White House, he (Adolf) would have not committed suicide but would have laughed himself to death!!!

zerocash's picture

The only gold that Germany will see will be in the World Cup which they'll win tonight. And they will have to return it in 4 years.

"Made of 18 carat gold with a malachite base, it stands 36.8 centimeters high and weighs 6.1 kilograms."


lakecity55's picture

Batting .500, ZH! The crazy Hitler photo and Zoltar in the same day!!


Sudden Debt's picture

For another 25 cents, he'll tell ya how rich you'll become

Escrava Isaura's picture

Nothing new here… Next thread 

LetThemEatRand's picture

Also featured in this week's edition of Duh Magazine: the sun is hot.

TeamDepends's picture

Translation:  Ve are so ferry, ferry tired, so ferry tired of propping up you southerners who, think a three day workweek is too long und vant to retire at forty.

agent default's picture

More to the point: We want out of this EU/Euro lunacy.

Doug's picture

Zey created zis lunacy.  If ze rest of ze Europeans were more industrious like ze German people, ze Euro experiment vould have voorked.

Sudden Debt's picture

Welll... And yet they're in the same boat and there's only one captain.

yogibear's picture

It's a Bundesbank CYA moment.

When inflation gets out of control the Bundesbank can say "See, we told you!"

Germany has heard this song before in the early 1920's.

Devon's picture

It was the deflation and mass unemployment under Bruning in the 1930's which done for Germany, rather than the hyperinflation of the 1920's. 

disabledvet's picture

This is advocating for continued deflation. I do like how it's couched in "taking one for the team" though. Still wondering who pays for all the defaults now cascading out that way too.

This is more Thelma and Louise than Hitler.

Or the movie "Airplane."

Devon's picture

Germany should either:

1. STFU as they have reeked carnage on the rest of Europe with their selfish monetary policy, refusal of fiscal union, eurobonds.......

2. Leave the Euro and go back to the DM. 

What would help is the spineless buggers like Hollande, Rajoy, Renzi making Merkel put up or shut up, instead of watching their economies go down the shitter in the vain hope that Merkel the Geman electorate and the German Constitutional Court are all suddenly going to have a change of heart. 

PS. Sensible option is number 2, and whilst destoying the Euro would have the bonus of destroying the EU.

agent default's picture

Whatever causes the Eu and the Euro to assplode I am for it.  Including appointing the Bernank at the ECB.

ZerOhead's picture

Larry Summers could do the job twice as fast for a couple of hundred million plus bennies...

Dugald's picture


Its "wreaked"  with a WubleU  got it?

G.O.O.D's picture

This is nothing more bombs, bullets and blond bitchez wont cure. Works everytime...

Salsipuedes's picture

Ich bin ein Berliner! Es ist eine unwahrsheidlich schlecte sachen! Wo ist mein bier stein?

Obamanism's picture
Der Bankier tranken Ihr Bier und ist jetzt in Frankfurt. Hier ist die Rechnung
Salsipuedes's picture

Ach! Gotverdaminamal! Sie haben recht! Genau! Scheisse! Ich bin PISSED!

Obamanism's picture
Guten Tag Herr. Bitte halten Sie öffnen die Tür für den CIA-Chef, was, den er auch geht
Salsipuedes's picture

 Jawohl Herr Oberstschteheneingeraffenrichtungshaffengutgestelleneinsheitsenhaltensturm! Einverstanden! Mach ich ganz schnell mein Herr! (I'd almost rather pay my taxes, but not quite.)

booboo's picture

Der fukin, floggin und muggin duh muppetfluggins.

Salsipuedes's picture

That's not German, it's booboo. What? You're quoting Bernanke?

Dugald's picture

Wie ich immer sage Ihnen, es ist alles eine teuflische britischen Grundstück .....

Salsipuedes's picture

Stimmt schon. Britania uber alles!

25or6to4's picture

Is the next article on ZH going to be one showing Jens Weidmann committing suicide via ten shots to the head with a nail gun?

Salsipuedes's picture

Neuschwanstein / Swan Dive / No Note (but a selfie of him staring into the abyss).

PontifexMaximus's picture

Never, Draghi needs him as a scapegoat!

no more banksters's picture

"The name "godmother" came because of the "clique of Frankfurt", of the international bankers and oligarchs which dominate Europe, work with the methods of mafia, Omerta and blackmail. Merkel, who is in charge, is using methods of mafia to impose her policies: silence, Omerta law, third class collaborators who are determined to do whatever is necessary, wherever treasons needed - another East-German heritage. Merkel's 70s favorite movie that she extolled recently in an event, is full of treasons."


Seeking Aphids's picture

Fact is that the EU have no choice but to follow the USA's lead and keep interest rates low for as long as it takes the US to bring down its debt to a reasonable level....ie forever or until the whole thing crashes and burns, ie deefault - so eet ees not dee fault of dee EeUu.

ZerOhead's picture

My thoughts exactly.

" ... this phase of expansive monetary policy, should not last longer than is absolutely necessary."

With a completely disengaged financial system teetering on the brink of collapse at any given moment the only way to stay alive is to keep printing and hope that growth and/or inflation magically enters the real economy in a non-destructive non-interest rate raising way.

Ain't gonna happen.

Print till she blows is all they can do now.

Salsipuedes's picture

Are you suggesting one look out from below? Not if you're chillaxin" in your penthouse bunker with a violin shaped pool, Jay Z on the box and y'all takin' calls from Jamie and Dick and Mich and Warren. No not Beatty muthafuka! He can't even get valet underground parking! Shit.

ZerOhead's picture

Going to ba a lot of very nervous MF'ers looking out from below, above, to the left, to the right, outside and even inside their own MF'ing cribs when this sucker goes down...

Salsipuedes's picture

Word bro! I be diggin' a secret tunnel with my coke spoon jus' in case.

Smegley Wanxalot's picture

"If we pursued our own monetary policy... it would look different," explained Bundesbank chief Jens Weidmann.


Should have thought about that before you handed over your monetary policy to the devil, Jens Weidmann.

Duffy Duck's picture

monetary policy is too centralized and too in the hands of pseudoscientists whose purpose is to safeguard a monetary system which by design transfers wealth from productive labor to malinvested capital.

Dugald's picture


In my part of Australia it just got down to 2.5C, the lowest in 100 years....

Now tell me more about this Global Warming shit!!