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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Sat, 07/12/2014 - 14:18 | 4950242 ebworthen
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.

Sat, 07/12/2014 - 14:24 | 4950269 TahoeBilly2012
TahoeBilly2012's picture

Where's Banzai7?

Sat, 07/12/2014 - 14:37 | 4950309 BaBaBouy
BaBaBouy's picture

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

Sat, 07/12/2014 - 14:39 | 4950313 BaBaBouy
BaBaBouy's picture

==> Where's Banzai7?

Taking Inventory Of His GOLD...

Sat, 07/12/2014 - 15:45 | 4950501 Leonardo Fibonacci2
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.

https://www.youtube.com/watch?v=mVWHgMMF0cM&index=5&list=FLR0UPShKxRN5gm...

Sat, 07/12/2014 - 15:55 | 4950561 Thomas
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". 

Sat, 07/12/2014 - 16:02 | 4950574 Leonardo Fibonacci2
Leonardo Fibonacci2's picture

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

Sat, 07/12/2014 - 16:16 | 4950609 Pinto Currency
Pinto Currency's picture

 

 

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

Sat, 07/12/2014 - 17:25 | 4950759 max2205
max2205's picture

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

 

Wake up people

Sat, 07/12/2014 - 17:26 | 4950760 Son of Loki
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 ....

Sat, 07/12/2014 - 16:00 | 4950562 Leonardo Fibonacci2
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!!!

Sat, 07/12/2014 - 15:11 | 4950417 negative rates
negative rates's picture

Got sent to jail. 

 

Hey, lets go over to your house, and sometimes we can go over to my house.

Sun, 07/13/2014 - 07:17 | 4951839 zerocash
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."

http://en.wikipedia.org/wiki/FIFA_World_Cup_Trophy

Sat, 07/12/2014 - 14:20 | 4950252 lakecity55
lakecity55's picture

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

+1000

Sat, 07/12/2014 - 14:31 | 4950294 Sudden Debt
Sudden Debt's picture

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

Sat, 07/12/2014 - 14:52 | 4950355 Escrava Isaura
Escrava Isaura's picture

Nothing new here… Next thread 

Sat, 07/12/2014 - 14:21 | 4950254 LetThemEatRand
LetThemEatRand's picture

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

Sat, 07/12/2014 - 14:22 | 4950260 TeamDepends
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.

Sat, 07/12/2014 - 14:31 | 4950295 agent default
agent default's picture

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

Sat, 07/12/2014 - 15:24 | 4950467 Doug
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.

Sat, 07/12/2014 - 14:29 | 4950286 Sudden Debt
Sudden Debt's picture

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

Sat, 07/12/2014 - 14:29 | 4950289 yogibear
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.

Sat, 07/12/2014 - 14:42 | 4950322 Devon
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. 

Sat, 07/12/2014 - 15:04 | 4950398 disabledvet
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."

Sat, 07/12/2014 - 14:34 | 4950302 Devon
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.

Sat, 07/12/2014 - 14:45 | 4950331 agent default
agent default's picture

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

Sat, 07/12/2014 - 15:19 | 4950447 ZerOhead
ZerOhead's picture

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

Sat, 07/12/2014 - 20:56 | 4951208 Dugald
Dugald's picture

 

Its "wreaked"  with a WubleU  got it?

Sat, 07/12/2014 - 14:36 | 4950305 G.O.O.D
G.O.O.D's picture

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

Sat, 07/12/2014 - 15:01 | 4950390 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

Blondes are overrated. I've little experience with bombs and bullets though, so I cannot speak to those points.

Sat, 07/12/2014 - 14:49 | 4950348 Salsipuedes
Salsipuedes's picture

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

Sat, 07/12/2014 - 15:16 | 4950434 Obamanism
Obamanism's picture
Der Bankier tranken Ihr Bier und ist jetzt in Frankfurt. Hier ist die Rechnung
Sat, 07/12/2014 - 15:24 | 4950468 Salsipuedes
Salsipuedes's picture

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

Sat, 07/12/2014 - 16:25 | 4950632 Obamanism
Obamanism's picture
Guten Tag Herr. Bitte halten Sie öffnen die Tür für den CIA-Chef, was, den er auch geht
Sat, 07/12/2014 - 20:59 | 4951219 Salsipuedes
Salsipuedes's picture

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

Sat, 07/12/2014 - 15:47 | 4950539 booboo
booboo's picture

Der fukin, floggin und muggin duh muppetfluggins.

Sat, 07/12/2014 - 16:16 | 4950610 Salsipuedes
Salsipuedes's picture

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

Sat, 07/12/2014 - 21:07 | 4951241 Dugald
Dugald's picture

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

Sat, 07/12/2014 - 21:10 | 4951250 Salsipuedes
Salsipuedes's picture

Stimmt schon. Britania uber alles!

Sat, 07/12/2014 - 14:51 | 4950356 DOGGONE
DOGGONE's picture

"The Public Be Suckered"
http://patrick.net/forum/?p=1230886

Sat, 07/12/2014 - 14:56 | 4950375 25or6to4
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?

Sat, 07/12/2014 - 15:00 | 4950384 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

At this point, it would not surprise me. =)

Sat, 07/12/2014 - 15:18 | 4950443 Salsipuedes
Salsipuedes's picture

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

Sat, 07/12/2014 - 15:22 | 4950457 PontifexMaximus
PontifexMaximus's picture

Never, Draghi needs him as a scapegoat!

Sat, 07/12/2014 - 15:00 | 4950385 no more banksters
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."

http://failedevolution.blogspot.gr/2014/03/who-is-godmother.html

Sat, 07/12/2014 - 15:00 | 4950389 Seeking Aphids
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.

Sat, 07/12/2014 - 15:14 | 4950414 ZerOhead
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.

Sat, 07/12/2014 - 15:37 | 4950516 Salsipuedes
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.

Sat, 07/12/2014 - 15:49 | 4950547 ZerOhead
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...

Sat, 07/12/2014 - 16:23 | 4950624 Salsipuedes
Salsipuedes's picture

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

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