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ECB Member Tells The Truth: Debt Monetization Is The Beginning Of The End
We will present the following quick note Bloomberg without any commentary because it could well come from any post we ourselves could have written.
ECB Governing Council member Yves Mersch said that monetizing government debts "is tantamount to inflation" and "not feasible." To use inflation to lower the fiscal burden "would reduce incentives for governments" to tackle their debt burdens and "would raise the risks of even higher future inflation and greater output volatility. Uncontrollable wage-price spirals would be likely." Mersch said in a speech in Frankfurt today. He also added that you can not make the ECB as a "lender of last resort for governments" and that governments must live up to own responsibilities.
And scene.
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As in the USA, if you don't call it "monetization", it's OK.
It's amazing that by merely stating the extremely obvious, Yves Mersch has become the beacon of honesty and truth.
Really? He's a bankster, and a joo one at that. The only reason we're even at this stage is because Germans left the "ecb". Another joo central bankster Weimar? No thanks.
Fuck him. Off with his head too!
Once the central bank started charging interest on it's money it was mathematically doomed to fail. Fortunately for the Europeans their central bank only lasted 1.5 decades. The poor Americans have put up with theirs for an entire century.
His comments clue into how slowly the hyper inflationary spiral begins. Of course they will print in the end but the cuts will never come, or at least not nearly enough for it to work.. but it almost worked we just didn't cut enough.. lets print some more and this time will cut more so it works until that doesn't work either.... and thus goes the moral hazard.. next comes the printing just to get through the next month, week day. The only anchor is gold bitches or be swept away.
History informs us that it ALWAYS ends this way ... and yet, all the European central bankers are in firm denial of this reality ... or, they are aware of the truth, but they're hoping for a miracle if they can just kick the can one more time ...
Exactly. Printing to fix the fiscal side, but when inflation further deteriorates the economy (possibly even magnified by gov't cuts if they actually get that far), the plebs get angry and the Keynesian politicians get a bigger voice (because they can fix it by just spending over here). That ends the ‘we’ll print, but then we have to cut’ as spending increases to fill the gap that is created as economics deteriorate. Then we are back to printing because there is no other fiscal solution (aside from the best, default). Its a vicious circle of destruction.
Your dead on, we are the same nation that measures inflation but leave out food and fuel the two things that people can't do without. Monetization is happening and when it comes into being more clearly we will see it up front in HD.
They will find this guy suicided in 24 hours or less.
"Shot himself in the temple... .... twice"
Or hung from a balcony naked, with hands tied behind his back and feet bound.
with some black prostitute housekeeper stuck to his dick
No, more like shot himself twice at the back of his head with a shot gun! You can add with both hands tied, if you think if it's not ridiculous enough.
His body will be found in Fort Marcy Park, but in spite of the head wound there will be no blood at the scene.
we Luxembourgers are still a proud little country (mainly because we're ridiculously small).
We've always said what we think and we tend to suffer from delusions of being untouchable and invincible...
Amen
Yet that's exactly what they are doing. Hmmm, let's try austerity again. Oh that's right the rioters are back, that is bad. Back to printin'... everybody wins until....
Wish the FED was as responsible!! Debt on top of debt does NOT work!!!!
WOW.....I just wish the U.S. government or the Fed would wake up and smell the reality coffee this guy's serving......won't happen, but one can dream.
http://www.thetrader.se/2011/11/15/rates-and-spreads-exploding/
someone tell this to the usa. the bernanke is a student of the depression, so we're all safe
OT, cute girl gives more bad news for Japan (see video link with story):
http://www3.nhk.or.jp/daily/english/20111115_03.html
Radioactive cesium may have reached Hokkaido
"Nagoya University professor Tetsuzo Yasunari says the simulation suggested cesium had dispersed across a wide area. He called for a nationwide testing of soil, and warnings of hot spots where radiation levels are high."
And Japan will build playgrounds on the hot spots just to prove they are safe. I think they know probably many areas are contaminated and below standard. But Japan is only so big, so they will ignore what they can and let others worry about it in 5-10 years.
I truly believe this guy is correct and every austrian out there would agree with him but if we have been printing non stop over here for what...ten years?...why have we not proven him correct yet?
Because the markets, which would reveal the disaster, are being manipulated by central banks, governments and the TBTF. The system has collapsed already... you just aren't allowed to see it.
I agree but as expensive as $4 a gallon is I would think it would be much higher. Food prices much higher. I understand the argument that we export the inflation to other countries and by that I mean I hae no understanding of how that works.
Those that pump the oil need the US and the paper dollar to keep themselves safe. They dare not break the system. As far as food goes, the actual raw materials cost is minimal. There's about 10 cents of wheat in a box of Wheaties. If the raw material doubles in price, that translates into a 40-50 cent increase in the final price. The rest of the cost is packaging, advertising, and royalties to the guy whose face is on the box. Milk is manipulated too - 70% of all fluid milk sold is run thru Dean Foods. You may not see thier name on the jug but they control the system.
We export inflation because we pay for everything with conjured money from Ben's printing press. Since we artificially pay more, then everyone else has to pay more.
I could go on, but you get the idea... we are all just pawns...
Yeah it's true.
Massive deleveraging causes deflation in the immediate aftermath of the crisis. In the same way that "stimulus" is supposed to replace reduced economic activity, printing is supposed to offset the shrinking of the money supply and the slowing of the money multiplier. The problem arises when the increase in money has to be removed from the system--in our case, about 3T extra dollars so far. (This is just the beginning) When the printing is obvious to all, in the form of outright QE, the inflation comes more quickly, as speculators bid up real assets (commodities) immediately. Rates go down as the Fed buys bonds, but the monetization eventually causes a lack of faith in the bonds themselves, driving rates substantially higher. If you wait long enough, your $4 gas (which should have gone down due to less demand) will double...and then again, and again, more and more quickly if we get the hyper-inflation that many here are predicting.
We got to export our inflation. But don't worry, when all those dollars come home to rest we will see the effects of all that printing.
if we have been printing non stop over here for what...ten years?...why have we not proven him correct yet?
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Ummm... 45+ million of 'food stamps' (and a great deal of them don't drive cars or have health insurance because they can't afford it)... And the ranks of those are growing... I don't know about you, but I'd say we have proven him correct...
A lot of people are not doing well right now and it is not their fault. I agree with that. But you could point out a lot of reasons why people have lost their wealth and wealth is a shitty word for what I mean. You show me a family of five that is living on food stamps and I will show you two idiots that probably should not have had 3 kids when they could not afford the first one. That sounds shallow I know but reality is what it is.
I am referring specifically to inflation.. Eye popping inflation where people go "holy shit". Thats all I meant. Maybe it is here and I am ignorant to how bad it really is. I concede that. But my premise for a lot of planning I did was for a day most people did not think would come.
==> Eye popping inflation where people go "holy shit".
I dunno 'bout you, but I go all "holy shit" just about every time I'm in the cash register at the grocery these days.
Even Headline News reports that the cost of this year's turkey dinner is up 22%. Is that not eye-popping enough?
It's not that they shouldn't have had three kids. It's that they shouldn't have been allowed to become dependent on handouts.
Economic realities should have forced them out of the city to a plot of ground where they could raise food to feed their children. I know it would be harsh, but people would survive. They would build character and have stories to tell their grandchildren.
Instead, we've got 45 million people dependent upon an economically unviable food source who will starve or become violent when the system comes to a precipitous and catastrophic end.
FU nanny state liberals. The blood will be on your hands.
Just as well they're not already secretly monetizing debt behind the scenes then. That would be illegal for one thing, and the ECB would NEVER do anything illegal, would they?
I believe they really are 100% sterilizing all their PIIGS bond purchases, but then I also believe in the tooth fairy.
What a pathetic country we turned into. But the 3% are doing fine. Not to worry. It just amazes me what MSM devotes most of their time reporting on.
And just watched Cain and his Lybia comments for the first time. Oh...My....God...
But just think how it will increase American tourists in Europe, at least for a small window of time.
They better have this on video or it will be denied. Markets seem to be frontrunning the denial of this article
Maybe those with somewhat better visibility are starting to position themselves for the history books (since they must know that their words will have no effect on the present).
It's time to head for the basement when bank presidents and politicians suddenly start calling press conferences simply to announce that they just want everybody to know that the only thing they've ever wanted is to do what's best for (insert sovereign nation/people here).
So whey u agree with what the ECB members say they are "reliable" but when u don't they are "muppets"... pff
Tyler did not agree, or call the ECB member 'reliable' anywhere at all, just printed the statement.
I quote from the opening comment:
We will present the following quick note Bloomberg without any commentary because it could well come from any post we ourselves could have written.
Seems they figured by now they would have just 'imposed austerity' by now and everything would be going swimmingly. But something went wrong on the way to the 1 world bank, maybe Benjamin Fulfords crazy stories about the 'white dragon society' winning against the 'NWO' has something to them...we'll see. BUT, something is clearly not working as planned for them, thats what I see anyway.
In today's other news....looks like the ECB has bought Italian bonds twice already today, and I haven't had my bagel yet.
The ECB will print. The German will buckle under the pressure and relent. It will only make things worse in the long term, but print they will. After a brief yield-induced sell-off, stocks and especially commodities will move higher. Stay long Gold - 2,300 next year is a decent enough target.
Beginning of the end? Nah, we're well into the closing act already. Folks just don't get it because there's no intermission or curtains.
Now wait just a cotton-pickin' second, Yves!
I did NOT ask for reality to be sprinkled on my morning waffles!
And stop it with the shit-colored Skittles, too! Those were NEVER in the original assortment of flavors!
Nah shit colored Skittles sure arent very festive.
Duh, really? How much is this guy getting paid for being so smart?
TSTC: A goos short or buy puts today:
Fraud report at;
http://seekingalpha.com/instablog/1054739-morrison-security-research/230781-telestone-technologies-nasdaq-tstc-the-most-dangerous-chinese-reverse-merger
Dear Yves,
Every government in the history of the world will eventually abandon its responsibility to sound money and print. You sir should know this. The problem is you guys keep moving your lips and lying. STFU and do the right thing instead of continually floating trial balloons to placate the bond vigilantes. The more you talk, the weaker you look. Do the right thing and let these banker assholes take the haircut they deserve.
http://vegasxau.blogspot.com
Well its not like the EZ is NEW to printing and pumping hell how much have they done so far, $10 trillion Euros worth at least?
Way off topic but CNN has an article that high IQ and drug use linked.
Given how much pot I have smoked I guess that makes me an Einstein.
That is, in fact, way off topic. Except that the only explanation for US fiscal and monetary policy is that those guys are all really, really, really smart.
And there you have it. The Euro Zone will come to an end due to Germany and the ECB's refusal to accept the obvious need for Eurobonds and reflationary lowering of the euro towards its PPP. So rather than help the peripheral countries with sound policies, Germany (Mersch, Merkel) will see the Euro go 0.00 bid.
Good. I hope theyre all hanged and or burned in the riots theyve caused.
Synonyms:
(verb) disclose, uncover, unfold, expose, discover, show
"Live up to their own responsibilities". Who does that anymore?
2012 is shaping up to be a great year for the "developed" (hahahaha) countries!
Fuck you topcallingtroll! DoChenBearing, Newt fucking Gingrich? Man, you're dumb!!!
seconded
Once you try to predict and anticipate ECB actions, you soon realize that it takes a psychopath to know one. So, the better you become at predicting things, and as your prediction skills improve, and you look yourself into the mirror, you realize that your face is changing. You are becoming more like "The Joker" in "Batman: The Dark Knight".
1:55: "They're schemers... Schemers trying to control their little worlds...I'm not a schemer. I try to show the schemers how... pathetic their attempts to control things really are."
what this world needs is a better class of criminal
relax, it's all a joke
The people in the country affected just need to stand up and say, NO MORE! Then we will see how fast the printing presses begin to roll because if the debt is defaulted, the outcome is that these clowns are out of a job and they don't want that. They are simply bluffing. Debt is a state of mind.
Uncontrollable wage-price spirals would be likely
Would be? Has he NOT seen what has happened in the United States? Unlike the ECB, which has been a little more transparent about its inflationary models' affect on food prices, savings, and wages, the Federal Reserve (which has done 100x's more damage to the USD), has waged a successful war on wages the last 12 years - and has been winning. The median income is $26K - you can barely buy a new car with that.
BTW, how about hte Mayans calling the enveitable collapse of the world economy by 2012 almost 4K years ago?
The ECB is not accepting the inherent deglobalisation momentum.
The factories will have to come home I am afraid - the global wage slave arbitrage system is over.
It was a huge profit making excercise for the elites when operational but there is simply too much Bunker fuel lost in the Pacific and Atlantic now.
They will destroy whatever organic domestic productivity that is left in Europe if they do not provide euros for countries to defecit spend.
There actions are not unlike Volkers decapitalization experiment of 1980 - however there is little capital left to take from the system now.
Towns such as Valenciennes with easy canal access for heavy goods will have to become major steel & textile producers again.
en.wikipedia.org/wiki/Valenciennes
Globalization is not working, the people hate it thats just the bottom line...yet the bankers have been planning for a 1 world bank and 1 world govt for many decades now. I dont believe theyre going 'de-globalization' at all I think they just see total globalization is not workable, and theyve gone all-in on it.
The bankers do not want deglobalisation but entropy is a bitch - the supply lines are just too long.
Anyhow in the above town the French civil servents are ahead of the game - they are preparing systems to transport lowly paid operatives to work.
They have a innovative new Tram / train concept suitable for medium size industrial towns that uses the old 19th century rail infrastructure.
This is unlike previous metropolitan tram projects in France.
www.trams-in-france.net/valenciennes.htm
This in conjunction with the nearby canal system makes it ripe for industrial redevelopment.
For what it's worth, I don't think this guy is going to die mysteriously or anything like it.
For various reasons, I don't think you will see the ECB doing any large scale EZ bond monetization at all. Just a few fairly sterilised interventions as a sop to the politicians until the earlier of:
a) Some sort of rescue paid for by outsiders (US, China?) who fear a EZ collapse for their own reasons; or (to me, much more likely)
b) A big enough crisis causes Germany to pull out into a new-DEM, inviting the Netherlands (and probably also France) to join it in a mini-EZ.
At that point most of the other EZ members will go bust.
A further point:
The 'standard' recovery rate assumed in CDS calculations is 40%. Being in mind these are sovereigns, nothing short of an occupying army will produce a recovery rate greater than zero...
Looks like the ECB has already done 'a few' EZ bond monetizations just this morning, look at the Italian bond chart LOL.
Just because they buy bonds doesn't stop them from sterilizing the purchases.
To me, one good reason (there are others) why they won't print outright is nothing more than pride. They know perfectly well they are regarded as an inferior version of the Bundesbank (and frankly they are). Further, they haven't forgotten those resignations under Trichet over the _basic idea_ of large scale bond purchases even with sterilization.
Their pride will not allow them to appear weak.
So they will not monetize in any size, at least not before Germany quits from the existing arrangements anyway, at which point the house burns down...
clearly this guy isn't cut out to be a central banker.
The point is there is no other solution other than monetizing the damn debt, or some other inflating measure that would include the ECB to print money... letting Europe collapse would utterly destroy the global financial system and then we would not have to talk about "hyperinflation" from the comfort of our homes.
We would kill eachother for food and clothes in the streets.
Wrong. The alternative to "print" is "default". Let the predatory banksters and their fictitious entities drop dead when they suffer the default they made happen.
http://www.bis.org/review/r111025b.pdf?frames=0
Interesting:
- If the euro is going to die, why not monetize with both hands? It buys some time, which is the only strategy remaining to the Eurocrats.
- There is money printing and what the ECB would do, two different things. If the ECB expands its balance sheet it would take on liabilities for every euro created. Whose liabilities? Very important question.
If the euros are created on the deadbeats' accounts there is no gain as the debt burden of the deadbeats increases for every euro created. The liabilities must attach to either a 'Pan-European' account which does not exist or to national entities with means: Germany, Finland, Netherlands and Sweden ... or to the IMF/Fed. The Fed is under scrutiny (it can provide euros by way of swap lines and has been doing so but not to the degree it would effect Italo-bond or even Greek bond yields.) So it is Germany or nothing.
If Germany isn't going to take on liabilities not much monetizing is going to take place.
If Germany takes on more liabilities they cannot exit the Eurozone which would amount to a German default. They would be stuck a trillion 'euro' debt. Any talk of exiting from the euro would bring on accusations of purposeful German default (cheating).
If Germany refuses liabilities the euro is DOA. Maybe Walter Funk's idea of a Greater Germany has run aground permanently: a Federal Republic of Europe cannot be a Fourth Reich.
ECB isn't going to 'print' and produce currency without booking liabilities (as was done in Weimar, Zimbabwe and elsewhere, which is simply seigniorage).
Portugal's PM says individual countries must not demand the ECB pays their debt, if they don't want to, says Portugal got it's business in order now, ECB must inspire confidence, will send the wrong signal if becoming the lender of last resort, cannot understand the "simplistic argument that the ECB must pay Portugal's debt".
http://www.nu.nl/economie/2666564/ecb-moet-niet-betalen-eurozondaars.html
Stating the obvious would be as follows:
"Governments can print their own money, interest free. Why would people choose to do it any other way?"
Governments don't print money, their co-criminals the unaccountable private central banks do . . . and the money does not come into existence interest free as it should. Everybody who has argued for nations to issue their own currencies interest free has found a bullet lodged in their head. Lincoln, McKinley, Kennedy, etc. Governments simply SPEND the money and enslave their citizens with debts. Interest on those perpetual debts is collected forcibly by the sister agency of every central bank, the "revenue department", aka the IRS (created same year as central bank).
tatoo that mans words on the foreheads of the president and every member of the US congress!
Human nature is a fascinating study. When someone with the appearance of authority changes the meaning of words, people just lose their brains. We have to keep the record straight. Debt is not money. Debt can never be money. The promise in debt is the someday that never comes. Debt is not opportunity. Debt is indentured servitude. Just say "no" to debt. Picture two sunny side up eggs, sizzling in a skillet. This is your brain on fiat currency .....
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
Or will Germany depart the Euro and let the others print themselves isilly?
ECB Governing Council member Yves Mersch said that monetizing government debts "is tantamount to inflation" and "not feasible."
Ooh, ya think? Good grief, it's not the inmates running the asylum, it's those little, bitty tiny worm thingies - what are they called? You know, the ones which live for about 10-11 days.
Little tiny worms that last for 10-11 days?
Is it another ECB 'bright idea' on how to deal with the debt going 'poof' when it steps outside their ivory tower into the sunlight!
...seems PaperBugsBurn is a tad negative on the bankers....
"You know, I just had a thought...we should really keep an eye out for icebergs. Hey, why is everybody running to the lifeboats?"
NASDAQ megaphone pattern on daily chart indicates a big move lies ahead.
SP500 monthly chart remains bearish and USDX weekly remains bullish, so it’s only a matter of time until the market makes its move.
http://stockmarket618.wordpress.com
hope you're right as i'm waiting on a market suicide jump to cash in my chips and get out of these crumbling markets ...and some more trading losses for Lloyd Goldman always cheers me up
ECB Governing Council member Yves Mersch said, "...To use inflation to lower the fiscal burden "would reduce incentives for governments"
What he omitted to mention is Govts trashing the currency to slime out of their debt obligations is supposed to save 0.1% of the nations arses (politicos) at the expense of breaking the back (and savings and financial stability) of the rest of the nation.
Call it chaos
Call it anarchy
Call it criminal negligence
Call for the pitchforks ....."I predict a riot, I predict a riot"
Spending is equally inflationary whether you issue bonds or not, you can see it if you have a clue, so in what sense is it "beginning of the end"? Nonsense, if it led to hyperinflation we would be having it for decades now.