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Germany's Sinn Blasts Draghi: "Deflation Is Just A Pretext To Bailout Southern Europe"
Germany could end up in a position where it would be constitutionally bound to leave the euro area, warns the IFO economic institute's Hans-Werner Sinn, which would force "somebody to give in and that would be the ECB." Sinn blasts the looming decision of ECB QE as an excuse to help weaker nations, exclaiming, as Bloomberg reports, "the risk of deflation is just a pretext for quantitative easing, for hammering out a bailout program for southern Europe."
As Bloomberg reports, European Central Bank policy makers are using the specter of deflation as an excuse to help the euro area’s weaker nations, said Hans-Werner Sinn, head of Germany’s Ifo economic institute.
The argument by central bankers that the ECB needs to act because inflation is below its goal of just under 2 percent isn’t covered by the treaty governing the currency union, Sinn said in a phone interview. Consumer prices in the euro area posted an annual decline in December for the first time in more than five years, though core inflation rose.
“The risk of deflation is just a pretext for quantitative easing, for hammering out a bailout program for southern Europe,” Sinn said. The decline in inflation is due to lower crude prices and “there’s no need for ECB action,” he said.
But Draghi's decision could have considerable consequences...
Quantitative easing “would give the ECB the function of lender of last resort toward individual states” in the euro area, said Sinn, who advocates an international conference to write down Greek debt.
While Bundesbank head Jens Weidmann, lawmakers in German Chancellor Angela Merkel’s coalition and economists such as Sinn criticize the ECB’s expanding role, Merkel hasn’t opposed Draghi publicly. The chancellor on Jan. 7 backed keeping Greece in the euro area as long as it fulfills its austerity commitments, saying she has “always” sought to keep the euro area from splintering.
The ECB’s Outright Monetary Transactions program, a bond-buying plan announced in 2012 after Draghi pledged to do “whatever it takes” to defend the currency, carries further risks for the euro area’s unity, Sinn said.
Europe would face “a big constitutional problem” if the European Union’s top tribunal declared the ECB’s plan legal in a non-binding opinion to be published Jan. 14, with a ruling four to six months later, he said.
Germany’s Constitutional Court ruled last year that OMT, which has never been used, probably overstepped the ECB’s mandate and asked the European Court of Justice to decide on its legality.
Germany could end up in a position where it would be constitutionally bound to leave the euro area, Sinn said. “Somebody would have to give in and that would be the ECB,” he said. “It would have to give up on OMT voluntarily.”
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I'd love to see Germany leave the eurozone. Implosion is inevitable anyway - why not add a catalyst?
Germans always seemed to be the biggest ones with the little blue flags on their cars. Especially older Germans. I guess they thought it would bring stability. BS - it caused chaos for southern Europe.
The EU needs to die. the Germans went down the money printing path before so they better thiunk really hard and dump Merkel. They had a really good trade situation going with Russia and screwed that up like idiots.
The eurozone gave the appearance of stability while times were good. Now that most members have broken their own fiscal rules and accumulated insurmountable levels of debt, it's the basket case it was always destined to become.
It has always been a ponzi scheme where they tax the hell out of everyone. Skim their cut in Brussels then send back money for crony friends in each country. This is what Congress and the Fed Govt do as well.
Poor countries joined to become rich. It just destroyed the economies of Spain, Greece, Italy and Portugal because they cannot export stuff with a German Mark for a currency. They also allowed Chinese imports about the same time.
Finally, you have two levels of politicians living off the taxpayers. Leaders in their countries and Brussels.
It is like Feudalism all over again. The taxpayers are serfs.
A week or so ago the crew on CNBS was giving Draghi props for doing more than the ECB mandates allow. When the Germans drop out of the Euro, the DM will be pegged at the Euro rate and the Euro will be pegged to the Ruble.
The only thing that has caused instability here is the fucking greedy corrupt Bankers lending money they never should have to Southern Europe. Just thought I would clear that up.
^ This times infinity. Goldman Sachs made money pumping up bad credit ratings by selling derivatives...they made piles of money, everyone else is losing. And our government won't reign these fuckers in because they ned them to keep kicking the can down the road.
No, No, No! You have the right idea with your psued, but you have it upside down. Our government won't reign these fuckers in, not because they 'need' them, but because the bankers OWN the government.
Here is some homework for you: Who are the members of the Senate Finance and Banking Committee? (You know, the representatives of the people who 'regulate' the banks for the common good?)
Where does their primary campaign contributions come from?
There are websites and lists galor that publish this shit, and shit it is.
The bankers don't need the government, they already own the fucking governennt, or the parts that count.
Then check out the revolving door of working for the Squid or the Morgue, then working on a Senate Banking committee rule making body as a 'public servant', then back to a TBTF bank with a promotion to work on a 'Regulatory Compliance' officer dealing with legislation he helped draft, and ... get it?
The whole system is so fundamentally corrupt we are gonna have to blow it up.
In which regard I point you to Draghi, Carney, Monti...the list goes on.
Instability comes from many quarters. Germany cannot abandon the Euro. If it goes back the the value of the Deutsche Mark will rise dramatically and Germany won't be able to export any more. The entire German economy is based on exports. Picture the smallest Audi selling for $70K in the U.S.
Auuuuuhhhh, Stuck - your statement 'Germany cannot abandon the Euro." is really dumb. Right up there with "Greece cannot abandon the Euro" much in vouge with Brussel Euorocrats nowdays. If the German constitutional court says staying with the Euro is unconstitutional, Germany must and can leave, and they will survive just fine, thanks.
First, if Germany leaves, the Euro folds. Period.
In the short run, this will be a bitch, but in the long run, it will work out ok, because the Euro was unworkable from the beginning: one central bank and 17 national central banks with 17 different cultures and financial needs? There is much good to a 'Eurozone" = no border checks, free flow of people and goods, no tariff bullshit between countries; but it does not require a centrailzed currency and central bank to do it, and I'll bet the experence gained over the past (roughly) 20 years will let the countries keep the good stuff and stuff the bad stuff (Central bank and central currency).
shit, if Germany can survive the unification of West and East Germany, they can survive any fucking thing. They are hard working, understand the importance of good fiscal and monetary policy, creative and inventive - look at how far they have come from the end of WWII. I'm no Duetchphile (France is my favorite European place, followed by Switzerland), but Germany is OK, and they can and will survive outside the Euro if need be, and if they do, the Euro currency and ECB is toast.
That does not and will not mean the great experiment in Europe unification is done. Time to reset and keep the good and continue.
Ok let me extinguish this myth here -- *again.*
If Germany goes back to the DM or they create a Neuro (I think the second solution would be better) Germany would not implode. Look at 1948-1999 (the German economic miracle) where the DM was a free floating independent currency. Moreover in that same timeframe annual German growth was 2.3% -- whereas since the EUR was introduced it has only been 0.8%. When you plug that into a traditional exponentional growth chart -- today Germany gives up in opportunity costs approximately 500.000.000.000€ per year. Or, on par EVERY GERMAN CITIZEN GIVES UP 6250€ PER YEAR TO BE A PART OF THE CLUB.
Moreover, German exports are derived from value added goods. E.g., its not the UK which relies on services for its economy. Germany actually exports stuff. However the Mercedes and Bosch drills are not made from Skittles and Unicorn Piss, but from plastics, metals, glass and rubbers. The problem is that Germany has none of these things within its boarders. It has wood. Only wood. So Germany must import EVERYTHING to put into its goods to inturn sell them (many times back to the country of origin.) So if the new DM goes up -- the price of rolled steel for my shiny new 2 series (in my head no way I am buying a car now with these market conditions) will fall through the floor, thus allowing the COGS (Cost of Goods Sold) item on BMW's balance sheet to fall in proportion to the currency inflation. Thus as long as Germany can maintain a competetive labor force -- it would simply revert to 1999 policies.
If you down vote this comment without taking the time to tell me why you down voted it -- you are a worthless kood-aide drinking, globalist supporting, piece of shit who hides from common sense and facts.
I haven't downvoted your comment because... I simply seldom even touch those voting buttons. but common sense and facts?
fact is that Germany has two neighbours that don't use the EUR: Switzerland and Denmark. with economies that are at the same level as Germany's or even better
according to your theory, both should keep their currencies up, up and enjoy great riches. why don't they?
your theory is not falsifiable, not the way you put it. so it's... unscientific, to a certain degree, as many econmic debate points
and you don't address the problem number one for Europe since 1971, in the monetary realm: the mighty global reserve currency, the USD
or, in the case of Germany's industries, you fail to notice how integrated they are with the rest of the eurozone
I rarely play with the buttons either. I find them fun sometimes to see how many downvotes I get, but when people junk comments without responding to them seems egregious to me.
That being said -- to compare the economy of Switzerland and Denmark with that of Germany -- is being a tad dishonest. Both countries have populations with less than 10 million and are service oriented nations without much industrial output. They don't let their economies skyrock because they don't need large amounts of foreign sourced raw materials -- the net benefit of doing so would be extremely detrimental. Moreover, geographically they are quite small. A skyrocketing currency without border controls would allow their populations to purchase all goods and services in foreign jurisdictions (ever been to Frankfurt an der Oder? Retail in Germany there is almost nonexistant because it is so much cheaper to drive across the river and purchase everything from cabbage to motor oil in Poland). Larger nations can have expensive currencies compared to their neighbours -- as the time and distance of driving prevents its population from purchasing goods abroad and reimporting them - absent border controls. Reestablish border controls between currency zones this problem takes care of itself.
A better anaology would be Poland, which in recent years has developed a strong industrial base, and has avoided (delayed would be a better term) EUR membership for as long as possible -- because in the current system they would be a net-creditor nation almost immediately. Meaning, they would be having to pay into the union to suppport the PIIGS moreso than they received as a net benefit from the Union. But this is a simple decision -- the costs associated with EMZ membership -- for Poland exceed benefits derived therefrom -- and yet -- they economy is growing at a rate greater than 2.5% per annum.
The DM in 99 was the world's 2nd reserve currency. The idea that Germans have to pay 6250€ per year to prevent negative externalities on other nations due to the USD is horrible justification. I could do a lot with that cash, as could the people I work with. Instead Germany had to slow down its growth engine to let the PIIGS keep up, and they still cannot keep up.
I fully understand how integrated German industry is in the EMZ. Trust me -- I understand that. But I also know how integrated they are into other nations, such as Russia, the United States and China. Just because a different currency is used does not mean you cannot have integrated industry with these nations.
Your talking points you pulled out of your EU MEP's economic handbook doesn't work on me. I learned something yesterday I found interesting -- anyone who works for the EU/EMZ (or subcontracts for them) are strictly forbidden from criticizing the monetary policies of the union. Interesting huh?
your "6250€ per year" is just a number. taken out of somewhere. you find Poland a better case because of size. fine. I'll make some Poland comparisons, in future
"I fully understand how integrated German industry is in the EMZ. Trust me -- I understand that. But I also know how integrated they are into other nations, such as Russia, the United States and China. Just because a different currency is used does not mean you cannot have integrated industry with these nations."
>>>> then I strongly doubt you understand how much more Germany is integrated in the eurozone. <<<< take the German export industries, and go down the supply chains
(I have something similarly interesting: Polish truckers driving in Germany have to get the German minimum wage. can you supply me with a link about this criticism ban clause?)
Sure, lets take BMW. I am sure you've sat in one or two.
The gauge cluster of EVERY SINGLE BMW made is in Hungary. A country that does not use the EUR. I can tell you --- for a fact -- production of ANY BMW has never once had to stop due to a lack of gauge clusters. Hungary uses a different currency than German does. Or, take the gas fuel pumps on the cars -- they come from Poland. Again, like before -- this has never caused a production problem. According to your theory, if the continent would go back to two different currencies -- this feat would be impossible due to "integration." However, here is a great example of how this doesn't happen. I could start going through files and come up with example after example after example of the diversification of components into German exports that are sourced from outside the EMZ without issue. Most of the time, production related issues come from source materials from highly unionized PIIGS nations, due to labor strikes. Its why there are many nations repositioning manufacturing facilities to the East as you won't have groups of tan shitheads striking because their 13th month's payment is going to be reduced. (There are only 12 months in a year)
Good -- I'm glad Germany required Polish truckers to be paid the German minimum wage. It encourages German trucking companies to hire German truck drivers as opposed to Polish ones. Speaking the language where you work fluently is very adventageous, especially with liability related accidents on the motorways.
EXCELLENT EXAMPLES
those parts produced in Hungary and Poland... Are on pricelists
and those pricelists... are in... EUR
why?
Because that's BMW's functional currency. Lets go back another level.
The plastics in Hungary. Are they priced in EUR (going into hungary) too? What about the rubber and metal in the fuel pumps? If the EUR went away tomorrow, the price list turns into a NEURO or DM price, and things continue on as normal.
"fact is that Germany has two neighbours that don't use the EUR: Switzerland and Denmark"
Where did you study Geography, if any? Germany has 4 neighbors that do not use the Euro! Switzerland, Denmark, Poland & Czech Republic!
It's worth remembering Germany's deal with France on currency union as quid pro quo for fudging the budgetary rules over re-unification. That said, given the nature of e vents it probably had to be done, and in any case I agree that Germany would do fine - the new DM or whatever would find it's own value.
As for the rest of ther Eurozone, break-up would mean a few very hard years followed by something almost mythical, called "recovery". That may be contrasted to the prospect of forever being financially repressed within the Euro. We are starting to see the social effects of that in extremism and fundamentalism, and it is my view that ifit comes to blows the muslims will be the scapegoats.
Frankly, there was never a good case for the Euro, unless you happened to be at Goldman Sachs. Free trade area? Yup - fine - that's what we in the UK only ever agreed to back in the 70's, and nowt else makes sense. Of course, Heath even lied about that, but that's another story.
"Frankly, there was never a good case for the Euro, unless you happened to be at Goldman Sachs "
it is about as logic as stating that there was never a good case for the USD, unless you happened to be a megabank. and your "financial repression within the EUR" is of doubtful value
if the EUR was such a darling of the Vampire Squid Firmly Attached To The Face Of Humanity, I ask myself how it comes that it did so much to sabotage it
perhaps because megabankers will just try to squeeze blood out of every stone?
No -- the USD would founded -- predominatly from British and German immigrants. Groups of people who looked at money much the same way.
The EUR was founded from Latin and Germanic nations. These two groups of people look at money in vastely different ways.
It took the US more than 150 years and a civil war to get the USD as we know it today.
It took the EUR -- well -- overnight and now people are scratching their heads as to why it isn't working.
Ghordo -- if the EUR was such a great idea, why are things so abysmal in the PIIGS and why has growth been so severly retarded in the North?
the USD and the EUR are, currently, and this will be valid for at least another seven days, using utterly different policies
explain this to me. explain to me the shrinking ECB balance sheet. explain the LTROs and the TLTROs instead of straight QE
yes, perhaps you are right: the ECB was "founded by Latins", and was "run by Latins" up to now. interesting. let's see if Germany leaves this "Latin" Club
and you are utterly confounding the US with it's currency, with that "It took the US more than 150 years and a civil war to get the USD as we know it today ".
The USD was born in 1913 and utterly transformed in 1971
The balance sheet is shrinking because Weidmann won't let Draghi near Mr. Yellen's keyboard. This doesn't detract for my argument.
I am not counfounding the USD with the US -- you lack a fundamental understanding of 18th and 19th Century American history.
Before the US as we know it came around today, we have something called the Articles of Confederation. This formed a union of Confederate States. It didn't work out so well, and in 1787 we had the constitutional convention where the power to coin money was enumerated to the Federal government in Article 1 Section 8. Thus, from the point of Constitutional Ratification to 1913 was over 100 years. During that period you have dollars worth differing values all over the place. When the West was being settled it was quite common for many little towns to have their own currencies and banks transacting in that currency. There was a whole industry which would buy PMs in places with cheaper PM prices and sell them across the country to places with more expensive PM prices. It was chaotic like this until 1913 when there was eventually a system of uniformity. We also fought a civil war, but before you think it was just about empowering shitheads like Al Sharpton, it was also an economic war as you had two groups of people who had two different economies which looked at money differently.
If Germany is forced to kill itself to support the Latins, I fully expect the AfD to utterly wipeout the CDU/CSU as well as finish off the FDP. A PASOK revolution in Germany, so to speak. You'll have the media screaming about it, and the EU Parliment jumping up and down in hysterics, all the while you have EFD group sitting and smiling and having a good laugh about the whole thing.
Day before yesterday, Mr. Farage talked about a 5th column on Faux News in the US. The EU also has a 5th column within it. This one however it open and notorious about its desires, and is gaining support for itself all the time.
Your beloved dream is coming to an end. Will you promise me that -- one day -- when this horrible "expirment" is over, you'll come on here and post that you were wrong. I don't want to have to drive to Brussels and start matching up dental records to the piles of bodies littered at the bases of tall buildings around the city.
Anyone who wants to make Germans pay for ever for the Southern incompetence, lazyness or whatever the reason for the underperformance is risking peace and hence a Euro NAZI!
Lest us not forget that the word "Nazi" comes from the German word "Nationalsozialismus" which means "National Socialism."
I have said for some time, and maintain it to this day, that those egregious EU/EMZ supporters who will always always support the project no matter what happens -- are nothing "European Socialists" Euzis would be a good term for them.
Exactly. Just to name a few who wanted a "united" Euope (on their terms just liek the EU) many years ago: Napoleon, Hitler, Stalin...
The scary thing is -- people want it this time. It just might happen.
OK ask the French to turn over their military to the EU or the Poles... There will be big white spots in the map!
The Elites are smarter than that. They will do it by stealth, slowly, and when people catch on, distract them with various events.
Haus,
While much is indeed wrong with the euro and you have some valid points, you really give me the impression that you are rooting for the euro to fall apart. The fact that the euro and the dollar are competitors now, combined with the fact that you are an American, might give us some insight into your motives to foment conflict here.
As I have pointed out to you before, but you did not reply, a strong, stable and 'independent' currency is not only linked to a performant economy, but also very much underwritten by security and intelligence capabilities that Germany currently does not have, but France does have. The partnership between France and Germany is natural in this regard.
If you are really that sympathetic to the German plight, why are you not advocating ( more ) that all American soldiers leave German soil ? Only rooting for a euro break-up ? Because it furthers ( or should I say saves ? ) US hegemony ?
You present your arguments as economical, but they seem to be politics in disguise.
I will reveal a bit of my politics : I think only a strong partnership between Germany and France can form a counterweight against the US in Europe.
I want to the US to leave Germany soil as well. I am no advocate of the American empire.
A strong, stable and "independent" currency is not only linked to a performant economy, but a strong, stable and "independent" monetary policy. Look at the DM before the EUR, it became the world's second reserve currency via good monetary police and not by being able to spy on their own citizens or the Russians, the firepower to back it up, but because those who managed the currency were truly independent of the government. They made the currency work irrespetive of what happened within the government.
I've been reading your posts, with great interest. It appears you're the first Frenchman I've encountered with readable English. Very good.
Assuming that France does infact have a strong security and intelligence service, you know who else has a strong security and intelligence service the Germans could turn to, which makes more sense than France -- Russia. If you can explain to me why, if given the opportunity, Germany having to chose between the two, would chose the French, when the Germans are dependant on the Russians for nat gas and much of their oil? The Russian economy is a "developing economy" with a demand for "valued added" products, AND an expanding middle class, unlike France which is up to its eyeballs in debt, high unemployment and a failing middle class.
I get that France is a great country, with a great culture and has a lot to offer the world. The problem with France since the end of the Monarchy (and everyone's favorite short man) -- the country has done essentially nothing except get itself into wars it can never win without running to the British and the Americans to come in and save the day. France has let socialism get into society and destroy its underlying economy, and now its let political correctness into its society which is destroying its culture. France has massive problems and it cannot compete with German goods. While the French will forego a VW Golf to get a Peugot 206 -- most of the rest of the world will not.
France can chose in which camp it wants to play. It can chose to be a big fish in a little pond (I think France is the natural leader of the EUR if the NEURO comes into existance) or, it can be an insignificant fish in an ocean.
See, the problem with the "but what about France" arguments apply to Russia (and many times even better), and then that leaves you asserting why the Germans should be BFFLS for life with the French and no the Russians.
Opportunity costs, they are important.
I am not French.
The problem with your proposal of some kind of a union between Germany and Russia is that it is hypothetical, while France and Germany form part of a union that exists. So your theory versus reality.
I think I am quite aware of the strong and weak points of the various big cultures and countries in Europe. I happen to have quite a good vantage point from were I live. Of course you can list weak points for every country, including France. The point is that France is a world power.
Europe has so much going for it. It is a matter of keeping it together. The ascent of the EU is such that US might start to find it threatening. It is in that light that I read your posts.
France was a world power. France is a world power in the same sense that Canada and Australia are world powers. Are the interconnected? Yes. Are the a "vital" part of the world economy? Yes. Does France still have the ability (like they used to) to essentially do whatever they so desire without fear of retribution? No.
I fully expect the US to collapse into itself in much the same was the USSR did in the early 90s. I do not think the USSA will do it as gracefully as the USSR did, and I fully expect us to try to start a war to keep the empire going. Its up to "Europe" if they want such a war, and it seems like -- at this point & time, "Europe" is currencly the US's lapdog. Like it has since 1945.
That being said -- there is an age old idiom, that "a chain is as strong as its weakest link." Currently, France is, economically, a (one of many) weak links in the EU and EMZ.
Lastly, yes, it discusses a theoretical union vs a union that currently dose exist. You are correct in that sense. However, I bring up the Russian anaology to make you back off your little list of why the Germans and French have to do everything together holding hands while driving through the Swiss Alps in a little convertible run off skittles and unicorn piss. The fact of the matter is -- for all the reasons on said list that you have -- I have all of those for Russia, plus some. Absent France reforming its economy in a meaningful way, the Germans and the French will never be able to share a currency without either a transfer union coupled with high French unemployment, or Germans making themselves as uncompetetive as the French on a global scale. E.g., suicide.
If you expect the Germans to kill themselves to help out France, I would venture to say you overestimate German post-war guilt.
"...France reforming its economy in a meaningful way"
You probably did not mean to point the way forward, but I think you did. Thanks :-)
You are a funny dude, but I have some problems figuring you out.
Anyways, if you are an American living in the EU now, help us prevent too many conflicts with the US in the future :-)
Are you familiar with the geopolitical theories of Mackinder ? I believe he had a huge influence on the Anglos' thinking. Keeping the EU from forming a union with Russia, however far-fetched, can be considered a US foreign policy goal. Such a union would possibly even be a casus belli for the US.
Think about it. It possibly helps to explain a few things. ( Ukraine, among others )
I think you are onto something.
It was the Anglo-Empire's greatest fear in 1937 to have Russian gas in German tanks, and German weapons in the hands of the Red Army. At that point in time the two were drifting -- albeit slowly -- towards one another. Together they would have been instoppable. Thus, the best way to preserve their power is to get their strongest opponents to fight one another as opposed as joining forces. Thereafter, the US and the UK stepped in after Russia and Germany were exhausted and destroyed and finished off them both, one economically the other militarily.
What scares me now given the current situation is Ukraine is someone dusted off the 1939 playbook and instead of just Germany this time, but the whole of "Europe" although Russia would be happy with just Germany again.
I am a mixed bag of thoughts. I am hard to figure out, but a few of my passions override others.
insurmountable? What do you call the US then, or Japan?
Insurmountable.
Populist hyperventilation aside, German leaders do know that their country profited most from the Euro. Leaving it would be economic suicide, so they'd be willing to make quite some efforts to keep it together. They just don't want to give their ok for free...
Germany won't leave the Eurozone. They'll cave in to Draghi so the printing can continue. It's all Bullshit!!!!
I love that greece is a fly in the ointment of the EU. Let them pay, pay, pay for their globalist dreams.
are Goldmen globalists? are leeches or parasites globalists? I guess if one looked hard enough the point could be made
they only care about one thing
making money for themselves
all others are goyim muppets
end of story
Deflation seems to be something the CB's have been able to create and jawbone everyone into believeing the lie about who the real enemy is over the last 100 years....the FED and inflation.
"We lazy? No, we resting!" —Mr. Panos
https://www.youtube.com/watch?v=Zvl9N9GdraQ
cue the ISIS attack !
Don't think about the economy... Worry about terrorists !!
Bailing out Southern Europe is just a pretext for bailing out German banks.
Indeed! German banks are holding enough Greek paper to bankrupt some of the biggest of them. Save Greece, QE? You bet, it is all about saving German Banks!
that's not true. check again who holds three-quarters of the Greek debt, and you'll notice they aren't banks at all
Draghi will have his war on the shoulders of Germany which will be used as fodder if the German Parliament doesn't find a way to oust Frau Merkel with haste in a "no confidence" vote.
Not seeing enough anger from the German people!
Case in point...
How are the Minsk accord(s) with Ukraine coming along?...
I love it
As long as politicians can force us to use their fiat money, they will use that power to create it for themselves and their supporters. Central banks would be powerless if we could trade with any money we chose.
Yes they would, as would everyone else. Dunno if that's a good field for applied anarchy.
Choose Mutti : Between SiNN and SIN...January 25 is approaching fast.
"“The risk of deflation is just a pretext for quantitative easing, for hammering out a bailout program for southern Europe,” Sinn said. The decline in inflation is due to lower crude prices and “there’s no need for ECB action,” "
Bailout Southern European Nations. NO.
Bailout EU Banking System. YES.
http://davidstockmanscontracorner.com/the-deflation-calamity-howlers-are...
"The truth of the matter is that the EU-19 is in clover because it’s consumers get a big break; and, on the other side of the economic equation, it produces almost no oil. Europe’s production is mainly in the UK and Norway and they have their own currencies. Accordingly, the ECB should be putting its printing presses on an extended sabbatical and declaring victory on the achievement of its “price stability” objective.
Indeed, the notion that the hairline puncture of the zero inflation line shown above is a precursor of a deflationary calamity amounts to economic voodoo. There has been no structural change whatsoever in the Eurozone economy since 2008 when the last oil-driven CPI drop occurred, and therefore no empirical basis for the notion that wages and prices are about to descend into an accelerating downward spiral. If anything Brussels’s dirigisme regime has made prices and wages even more “rigid” and “sticky” owing to it’s avalanche of new regulations, subsidies and other economic interventions.
The plain fact is that the euro zone like the rest of the DM has an inflationary bias that is embedded in six decades of history during which the euro and its predecessor currencies lost purchasing power month-in-and-month-out. So households are finally getting what will undoubtedly be a short respite from the inflation tax, but that is the extent of it. There is not one rational reason to believe that the relentless upward march of the price level shown below will not presently resume its well-worn path. "
Merkel is such a pussy.
they teach marxism to 16 year olds in europe. Nothing I have encountered in north america compares to the deep marxist indoctrination of europeans. There are those north americans that like their free stufff from .guv but enough people still want the chance to get rich or ahead. I would hazzard a guess that europeans sypathize because they hate the rich and powerful. As long as the benefits keep coming they don't see the bigger problems it creates. They think the rich pay for the benefits.
You do have funny ideas about Europe;-) Why not visit it? I'd recommend France for its wine and food and old cities.
Europeans have funny ideas about the US, too. They think all ppl there are stupid, uneducated war-crazy nationalists.
Nationalists, not so much, try globalists, and you are on to something.
Make that EU nationalists!
Spent 3 months there this summer. I met so many openly sympathetic marxists.
Funny they teach Marxism to my 7 yr old in USA public schools....
My 12 year old believes in global warming because its taught as fact.
Social mobility is higher in many European states than in the US. If you have a system with high level almost free medicine, high quality free education, few really poor people and few filthy rich, security, clean environment and with all that a possibility to become rich, why not have it? I'd choose a country where 80 percent of the population constitues a middle class over one where 80 percent of the population is fighitng for economic survival and 1 percent owns it all and keeps the rest obidient with militarized police and a never sleeping propaganda machine convincing kids from the cradle that they live in the best richest freest country where they have boundless possibilities to become presidents and tycoons.
Hans Werner Sinn is one of the smartest people on the planet in this space. He is highly accomplished and can predict with utmost precision which effects policy or financial decisions will have for a nation.
What are Draghi's credentials anyway?
He is of the tribe and he is making himself and his tribesmen lots of money fucking everyone else over the barrel.
It is so fucking obvious by now what is being done to us all.
Come on folks, this Sinn guy is ridiculous. In Germany his nickname is "Unsinn", i.e. "nonsense".
So Europe is in debt, and the ECB starts some QE. What have the US, GB or Japan done these last years?
And the constitution didn't matter when they bailed out banks, why should it matter now they bail out entire states?
You really find the weirdest, most irrelevant things on the net.
President of Ifo Institute
http://www.cesifo-group.de/ifoHome.html
So now he admits what his opponents have been saying for at least 5 years. Congrats!
(Not the first time he changes his opinion like that, when it becomes too obvious he was wrong.)
seriously?
yes.
And what fucking wreckage those shit for brains cunts in the US UK and Japan done.
Get back to sucking Draggys cock you moron
Expect the IMF to step in and watch the US go into deeper debt.
Until they base money on something real, like the internet money is just dots on a screen.
The IMF is already in. But they don't want to get deeper involved bc the EMs would revolt.
Sinn is probably right. Ctrl-P is another word for "band-aid".
But we're back to the same old same old political weakness. Mutti doesn't really want the ECB to hit Ctrl-P because she knows it's not the answer. But she's also unsure of whether Southern Europe can suffer the pain of slashing government spending to bring the final solution to their economies.
Here in the Deflationists Lounge we would caution people about fooling Mother Nature and using Deflation as a pretext for anything. Bad things might happen.
EU? They are trying to absorb the entire Ukraine, and even demanding war to conquer the part that want's nothing to do with the EU. They can't solve Greece, Spain and Italy are sinking, and they think they should absorb a bankrupt country of 40 million deadbeats.
Merkel is one of the big pushers for war and then union with Ukraine. They tried to conquer Ukraine twice in the 20th century, and now they see a chance to get it in the 21st. How do you afford this basket cause of beggars?
no, not EU. eurozone. the article is about the eurozone. stop confusing the two clubs. and if you haven't realized that they are two separate clubs, then perhaps you should start to, and so improve your commentary
Yeahbut, Jack's comments are right.
EZ members are also EU members and it's the EU that played a major role in the Ukraine uprising 12 months ago. And it's the EU that puppet Poroshenko and his paymasters/weapons suppliers in Langley/Washington/Westminster wants to drag Ukraine into and install NATO there. Too bad that East Ukraine doesn't like that idea too much.
and that's the whole point, isn't it? Ukraine is not about the EU. Ukraine is all about NATO, with the US pushing, pushing, pushing
The "EU part" is just being used and misused by the US and in part the UK for military alliance purposes since the Eastward Expansion
there is nothing about the EU in what Hunter Biden is doing in Ukraine, for example. Ukraine is not in the EU, currently
if you don't keep the three main european clubs apart, then it's "all the same", at which point I would have to ask myself the stupid question of why the UK isn't in the eurozone
I will take Greece and the points in this contest.
When the US prints money and JApan prints money and even China prints money, it's only logical that the EU should print money to keep up with the others. But right now there is no point to print much money, since euro is already going down quite a bit and oil dropped a lot.
Maybe they're not too worried in the European Central Bank any more since they've got the swap lines in place with the Fed but more importantly the large derivative positions in New York are now insured by the U.S. Government.She's all connected and contagion is a very real problem if anybody goes down,including Greece.Funny the big players in Europe are now meeting with Russia.Could be that the U.S. might be the one that'll get a big knife stuck in its back.
http://www.silverdoctors.com/jim-willie-oil-crash-to-accelerate-the-comi...
Of course ECB QE is illegal, butthe Washington-led empire has not cared about legality for decades.
Don't talk to the monkey, talk to the organ grinder.
Mario draghi is the monkey
Germany is the organ grinder.
Pay no attention to that gibbering monkey.
"using the specter of deflation as an excuse to help the euro area’s weaker nations"
Well yeah, cause God FORBID you should help the weaker ones. Better to let 'em suffer. Wouldn't want any 'excuses' to help them out, that might be like, Christian or something.
Seriously, fuck these people. I despise this attitude, this thinking their better than everyone else. They ran up quite a bill themselves, and had much of their debt forgiven after THEY screwed up. When they pay off their debts they can yap all about 'moral hazard'...until then they can shut the fuck up already.
Those who have been the beneficiaries of debt forgiveness have no moral standing to demand every nickel owed to them by others. They are a bunch of hypocrites.