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The ECB Will Fail Given The "History Lessons Of US And Japan", Warns Deutsche Bank
Recall that the stated purpose behind the reason why Mario Draghi's ECB is about to launch a European government debt monetization program ranging between EUR500 and 1000 billion is to halt deflation, spark credit creation and rekindle inflation. Alas, if that is indeed the case, then as Deutsche Bank said has already determined apriori, it will be a failure. Here's why from the biggest German bank.
First, a broad strokes preview of what the world's most confused Central bank will do this week:
[The ECB] is trapped down a dark alley and they will bite. For all the pros and cons of public QE as well as the hows and whens, at the end of the day the market has pushed the ECB into that corner. Within the context of the practical limitations of QE, we have no doubt that Draghi once again will leave a warm fuzzy feeling that they are prepared to do all that it takes. Of course, like OMT, it probably doesn’t mean they are buying BTPs come February 1st, but that doesn’t matter for BTPs. It also doesn’t matter for the Euro zone outlook given the dubitancy of QE efficacy.
And here is why the ECB too will follow its peers, the Fed and BOJ, in failing to boost inflation expectations which at last check were below the Lehman collapse levels and sliding fast (see "The Chart That Terrifies The Fed")
We suspect whatever the ECB “under delivers on” in substance, it will “over deliver” in terms of perceived commitment and Draghi rhetoric. So net it is hard to be very bearish on peripherals nor core markets. Core markets ultimately benefit from the perception that there just aren’t enough assets out there even for a small program of Euro 500 billion. As the table below shows the free float as defined by other investors is expected to be a paltry 26 percent this year (after Euro 300 billion in purchases for CY 2015). This compares with almost 50 percent in the US.
More importantly we doubt inflation expectations will spike sustainably higher on any announcement given the “failed” history lessons of US and Japan as well as doubts about QE making a difference quickly in the Euro zone. This really centers on the issues of the Euro zone’s different financial model (bank not security based) as well as the still ongoing deleveraging of the banks for regulatory purposes.
Ironic, because Zero Hedge pointed out precisely this distinction nearly three years ago in "A Few Quick Reminders Why NOTHING Has Been Fixed In Europe":
And we are also finally glad that with every passing day more and more banks, pundits and "straight to CNBC" experts wearing business suits realize what we said 6 years ago, namely that QE will never work as one can't fix a failed financial system due to record debt problem with more debt and even more props to support an even more failed financial system. And that QE has, is, and will continue failing... for everyone but the 1% of course, who with every passing day continue to tempt not only fate but the guillotines as well. Reference? See the French Revolution, because it is never different this time.
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I think this Automatic Earths article articulates your point clearer......
http://www.theautomaticearth.com/the-end-of-fed-qe-didnt-start-market-ma...
Price discovery is going to be a red headed bitch on 4 wheels.......
Ecclesiastes saya there is nothing new under the sun. That this is true is born out in Andrew Jackson's (unabridged) farewell address. The sins are not new, but the speed at which they can be created, taken to near-infinity, and donenon a global basis is new.
I read his speech, wow, makes ZH readers look like republicans. This guy just hated fiat, hated the fed, hated all the distortions caused by this fiat situation. He called is evil.
Jackson paid dearly for his beliefs.... and the pigman prevailed.....
DB: "...we doubt inflation expectations will spike sustainably higher on any announcement [of QE] given the “failed” history lessons of US and Japan as we"
ZH: "And that QE has, is, and will continue failing..."
Yeahbut...Deutsche Bank ought to know by now that when central bank policy fails - as QE has - TPTB continue with it regardless, expecting a different outcome. Would anyone expect anything different from a bunch of banksters?
I was told years ago that throwing money at problems doesn't fix them.
Will someone please tell Central Bankers.
We debt slaved some folks......
When do the assassinations start ? Until the populace wakes up and actually starts taking physical revenge on these vermin, nothing will change. Sorry, my outlook isn't too promising for this.
Funny.... we were just having a discussion over drinks about what kind of security detail Jamie Dimon has..... lol Those boys would have been smart to stay out of the lime light and stuff there egos in there pockets.... live longer that way.
In a banksters paradise.
The paradise designed and for banksters.
Assumption1 – Banksters are really smart and can do no wrong (false)
Remove all regulations to allow super-smart banksters to do their stuff (completed by 1999)
(Banksters have always been a bit resentful of their traditional role, where they just act as a service industry for the real economy)
Great idea – We banksters can produce our own products (Complex Financial Instruments and Complex Derivatives) we can be just like the other players in the real economy.
(Unfortunately, banksters trading with each other is a zero sum game and contributes zero to GDP)
Bankster work around – Complex financial instruments allow both parties to file profits with zero initial up front cost.
1999 -> 2008 Bankster ponzi scheme runs for 8 years before crashing and burning.
Profits posted on both sides of trades suddenly nett to the zero they always were, trillions disappear from the global economy.
The emporers new clothes are exposed for all to see but massive cover up ensures those not looking closely don’t realise.
The banksters paradise part 2 – the days of the Central Bankster .....
.
.
Hussman's take on the mess.
http://hussman.net/wmc/wmc150119.htm
I am not sure I agree with his views on the dollar being overvalved compared to the EURO and Yen.... my insight is based on the longer term... (like ancient graphs) from the 1960, 70, 80 to now.... data found on FRED "historial dollar index etc..." it seems like "the market" (commodities, equities etc) just rose like a bubble........ right around 1998 or so.....but I have great respect for the man.
It is going to be an interesting ride and hopfully a tale to tell to the grand kids over drinks after a dinner in the years to come. I remember tales told by "elders" of NYC circa 1917.... to 1945.
If DB says sell Euro you better bet your ass you are buying Euro this week.
Think about it. Euro has been trying to restructure have sound money and now everything seems contrary to that. At 5PM I'm going to go all in Euro VS JPY.
Euro zone is now under the gun by the Swiss bank. If you think they can do QE and completely collapse the Euro you're out of your mind.
The swiss caused the change of mindset. Abandoning printing. The next country to print or increase printing will fail.
it's the endgame for QE. Everyman for themselves.
The Fed knew this 6 months ago. That's why they stopped and here we got a sucker Japan to be the first target of financial collapse. Have to get rid of the world's oversupply somewhere why not the country that attacked us in WWII.
I think the QE details will disappoint - making the Euro stronger!
there's going to be an ecb-qe.
the eu. is a different animal than america, or japan.
in america, the fed. has the full backing of the govt., 1%ers, and the media, they know they'll be rewarded, so they just do their qe's.
the fed. can't lose in america, unless things break, they have 50% of the population that just asks, will this disrupt my entitlements.
we know the "markets", and the fundamentals are broke in america, but the entitlements keep on coming, so nothings broke.
headlines like this are just to make conversation, "trial balloons".
the fed., ecb., boe., boj., are the BIS, and they've been wildly successful, it's not their job to fix the present, their molding your future.
the eu. is like 28 gm's fighting over whose going to get the rights to use the eu. logo after the collapse.
Now is a good time for those aristocrats and oligarchs that wish to have their lives go on to begin funding the opposition to the NWO banksters. It is the path of the least resistance with the most to gain. Begin replacing the NWO with open source software now.
Did it months ago and am learning Linux @ 73. I realise that there is a strong desire on the part of many posting on here to put a spanner in the works, but an alternative game plan has to go hand in hand with that. If dubaibanker is broadly correct, and I think he is, then the alternative game is the important one, since the concatenation of forces involving the unbelievably stupid cabal of CB's and other riff-raff on the one hand, and the manifold winds blowing out of the east: Brics coming together under a new financial dispensation etc., will take care of the spanner requirement.......'we' need a game plan and jerking off in connection with news of plumetting graphs,failing markets and collapsing currencies is not it. So whats the post-apocalypse plan?
If QE and ZIRP are the only medications that central banks have to offer then all I can say is that we are headed for financial ebola.
And the only thing worse than financial ebola is war which the USA and Europe seem to be encouraging.
Expect stock markets to continue to slide next week. The collapse is just getting underway.
DOW
http://www.globaldeflationnews.com/dow-jones-industrial-averageelliott-w...
S&P 500
http://www.globaldeflationnews.com/sp-500-indexelliott-wave-update-for-w...
even the idea isn't good:
to get out of this they have to purge old bad loans and questionable loans and not create new ones.
Gerxit? (Jerks it?)
Israel bombs Syria today but not ISIS. Can it be anymore obvious that ISIS is usa and israel? There to destroy Syria, and then IRAN. All for the greater israel project
You should discover why Israel attacked the convoy near the Golan heights today. A bunch of now dead Hamas and Iranian generals looking for a place to stick missile launchers. There is more going on than ISIS in Syria but that don't fit your tin foil hat rant.
The key giveaway is the USA, CIA, and FBI logos on their 'Islamic" headscarves. The same logos that are emossed on your fracking tinfoil hat.
Brian Whitmer of EWI predicted the SNB would unpeg the Franc in his December newsletter. No other (non-EW) analysts even saw it coming.
http://www.globaldeflationnews.com/whitmer-of-elliott-wave-international...
Thanks for the link.
Brian Whitmer also predicts the break-up of the Eurozone.
Sounds legit. It really seems like the 'consolidation' pendulum is losing momentum quickly and is about to start it's swing towards independent countries again, and protectionism, possibly.
Couple of others did like the Swiss guy at KWN, and another guy I can't recall. But still, far to few on the record which is probably a good thing. The surprise woke a lot of people up and put a crack in the manipulation.
Thanks for the link.
Brian Whitmer also predicts the break-up of the Eurozone.
Sounds legit. It really seems like the 'consolidation' pendulum is losing momentum quickly and is about to start it's swing towards independent countries again, and protectionism, possibly.
Do I smell zee Germans double-daring Draghi?
Or, was this penned by the loose cannons still left in the bank?
I smell Draghi announcing some limited QE as approved by zee Germans, disappointing the markets, but then announcing that he will do MOAR at some point in the future.
More time is needed in order to allow China to acquire more gold reserves.There's not much time left.The United States is actually in on the deal with the IMF.They'll now be taking a smaller piece of the pie to allow China in.It's all part of switching to the new world currency through the SDR's.Can you say monetary reset.This is just another step towards it.A delaying tactic before the new world order.
The Swiss saw QE and got the fuck out of Dodge.
So, when the market collapses, US corporations are 70% underwater. Roughly.
That's just great.
Great indeed if you short them.
Very true, but even when you short something this sure, someone else needs to hold the other side of that bet.
At some point there will be no-one left in the casino.
I'm waiting for Mme Lagarde's 2015 speech to the national press conference before making any predictions on what is going to happen this year. Not to fly on 7/17 on a plane with the flight number 17 was pretty much a dead give away (pun intended). What's it going to be this year, Madame?
The question is, will the cabal allow Germany to leave the Euro if they want to? Does Germany have to start another war and lose again before that happens?