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Just Say Nein - Bundesbank On European QE: "Abandon The Idea Once And For All"

Tyler Durden's picture


While it will hardly come as a surprise to many that after making it abundantly clear that Germany is in total disagreement with ECB monetary policies, culminating in the departure of Jurgen Stark from the European central printing authority, Germany will not permit irresponsible, Bernanke-esque monetary policies, it probably should be noted that even following the most recent escalation of adverse developments in Europe, which are now on the verge of unwinding the entire Eurozone and with it the affiliated fake currency, that the German central bank just said that any European QE could only come over its dead body. Today channeling the inscription to the gates of hell from Dante's inferno is none other than yet another Bundesbank board member, Carl-Ludwig Thiele, who said that "Europe must abandon the idea that printing money, or quantitative easing, can be used to address the euro zone debt crisis...One idea should be brushed aside once and for all - namely the idea of printing the required money. Because that would threaten the most important foundation for a stable currency: the independence of a price stability orientated central bank."

In other words, the best Europe can hope for is massive liquidity provisioning as has been the case in recent months, when the ECB's balance sheet has soared by almost $1 trillion in 6 months (perhaps someone should ask the Bundesbank just what they think of that). However, for that to happen, banks have to continue to be on the brink, even more than now one could add, which simply means that the ECB will reactively provide liquidity to insolvent banks (at cheap rates) which will immediately turn around and redeposit the cash back at the ECB, but unlike the US, will not inject the monetary system with unsterilized cash. Which means one thing: Bernanke is and will continue to be stuck as the only source of marginal "Austrian" cash (i.e., market moving) in the world, and once the current episode of EUR-hatred passes, and it will, the revulsion will once again turn to where the next imminent money printing episode will come from - the 3rd subbasement of the Marriner Eccles building.

Reuters explains why the Bundesbank Just Said Nein:

Thiele called for euro zone countries to exercise fiscal discipline and said that boosting the resources of Europe's rescue funds would buy time to address the bloc's debt woes.


"But lasting confidence cannot be bought with money alone," he added in the text of a speech for delivery in Hamburg.

Thiele said the ECB's decision in May 2010 to buy Greek sovereign bond was a breach of a ban on monetary state financing in the euro zone.


He added that he believed the ECB's decision last August to extend its bond-purchase programme to Italy and Spain was driven by a majority view on the ECB Governing Council that the cost of borrowing was too high for the Italian and Spanish governments.


Bundesbank President Jens Weidmann also opposes the ECB's bond-buying programme, which he feels takes the central bank into the real of fiscal policy.


However, ECB figures released earlier on Monday showed the central bank more than trippled its bond purchases last week to the highest level since late November, spending 3.77 billion euros as a calm start to the New Year gave way to an intensification of the euro zone debt crisis.

And yet the market still continues to be convinced that the ECB will print in the conventional sense, "just because."

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Mon, 01/16/2012 - 15:00 | 2069123 Doctor Doom
Doctor Doom's picture

Wait and see

Mon, 01/16/2012 - 15:10 | 2069150 camaro68ss
camaro68ss's picture

O come on, just a little bump of hopeum

Mon, 01/16/2012 - 15:33 | 2069208 Chief KnocAHoma
Chief KnocAHoma's picture

Damn these Germans sure are touchy when it comes to printing funny money. It is almost like they have experienced something similar in their past like hyper inflation, mass murder and World War.

Lighten up you Huns. It's only paper. What's the worst that could happen?

Mon, 01/16/2012 - 15:42 | 2069231 BaBaBouy
BaBaBouy's picture

WOW - Unbelievable ... IS This TYPICAL EURO THINKING ???????????


Cruise disaster: captain neared rocks in stunt for friend's family  

In a stunt advertised on Facebook, captain of The Concordia Francesco Schettino allegedly sailed perilously close to the coast of Giglio so that the ship's head waiter could salute his family on land.


Deserves Execution ???

Mon, 01/16/2012 - 15:45 | 2069247 BaBaBouy
BaBaBouy's picture

Most Paper FIATS are Also Headed for the Rocks just off Giglio Isle...


GOLD Bitchez, GOLD ...

Mon, 01/16/2012 - 18:38 | 2069439 Ahmeexnal
Ahmeexnal's picture

when she say NEIN, she means JAWOHL MEIN KOMMANDANT !!

Mon, 01/16/2012 - 23:58 | 2070107 StychoKiller
StychoKiller's picture

Giglio looks an awful lot like "Gigolo" -- must be my sidslyxia! :>D

Mon, 01/16/2012 - 15:47 | 2069254 walküre
walküre's picture

Anyone with a mullet deserves to be executed or at least not be allowed to breed.

Mon, 01/16/2012 - 16:37 | 2069348 Chief KnocAHoma
Chief KnocAHoma's picture

A law like that could severly fuck up the demographics of Alabama.

Mon, 01/16/2012 - 16:54 | 2069378 MrBinkeyWhat
MrBinkeyWhat's picture

Easy now...Well maybe you are right. Never mind. Keep saying things like that.  Thanks a bunch!

MBW living in his "bug out location" in Deep South Alabama ;-)

Stay away, thank you very much.


Mon, 01/16/2012 - 17:29 | 2069387 TuesdayBen
TuesdayBen's picture

Hey, being the head-waiter is a big deal over there.  Speaking of which, I'd like to order a burger.  And, by the way, of the three cruises I've been on, on all three I was having to compete against the captain for the attention of the choicest ladies on the ship.  I'm betting the captain of this ship was distracted by some tail.

Mon, 01/16/2012 - 17:15 | 2069410 Spigot
Spigot's picture

And please understand how this perfectly illustrates the current "leadership" of the financial and political worlds as they dine on exquisite lunchen danties while the world is tearing straight into the jaws of the singularity.

A perfect portait if I do say so...

Mon, 01/16/2012 - 17:21 | 2069423 Chief KnocAHoma
Chief KnocAHoma's picture

It has been some time since we have had a report from our insider, but today he sent over this transcript from a conversation taped inside the White House just last week.

VALERIE JARRETT: (Pacing in the Oval Office as she reads the latest polls. She has a very worried look on her face.) Mr. President you still have strong support with blind homosexual dog groomers, but unfortunately every other demographic is fading.... even the media.

OBAMA: Valerie, Valerie... you worry too much. Everything will be fine we just need to shake up our team a little bit.

JARRETT: Yes Mr. President that is exactly what we need. Have you decided to call Hillary?

OBAMA: Yes, but in order to make this transition appear legit I had to convince Joe that his talents are needed more in another position of great importance.

JARRETT: Where are you moving him? State? Defense? No... Treasury?

OBAMA: Well I thought about Treasury, but came up with a better idea.


OBAMA: You're gonna love this. Not only is the position similar to Treasury, but we will get friends and family discounts.

JARRETT: Well what is it Mr. President? You have me very excited!

OBAMA: (Smiling as he let's out a drag from his cigaret.) I got him a job as a cruise ship captain in Italy.

Mon, 01/16/2012 - 20:57 | 2069778 Cabreado
Cabreado's picture

"WOW - Unbelievable ... IS This TYPICAL EURO THINKING ???????????"

No, it is typical thinking of the Self-Absorbed, protecting their illusion.
They live and die, and in-between breathe, protecting their illusion.

It ain't Europe. 

It is a sickness that has finally brought the so-called modern world to its knees.

Mon, 01/16/2012 - 18:47 | 2069591 living on the edge
living on the edge's picture

The game is over, period.

Plan accordingly.

Choose your options wisely.

Mon, 01/16/2012 - 19:38 | 2069678 GOSPLAN HERO
GOSPLAN HERO's picture

The use of 'Hun' or 'Huns' as an offensive nickname for the Germans was popularized by British propaganda and sections of the British media in World War 1.

... not taught in public schools.

Mon, 01/16/2012 - 21:33 | 2069852 UP Forester
UP Forester's picture

How about Kraut?

Ist das Verboten?

Mon, 01/16/2012 - 15:12 | 2069156 Popo
Popo's picture

Exactly.  Saying they're not going to print the money is one thing.

But as long as European sovereigns can create unlimited debt -- and Germany *doesn't* accept haircuts -- it sure looks like printing is still on the table one way of another.





Mon, 01/16/2012 - 15:19 | 2069174 Sandmann
Sandmann's picture

and if Germany refuses to backstop the ECB it looks a bit like an Italian cruise liner owned by a Florida-based corporation

Mon, 01/16/2012 - 15:30 | 2069213 redpill
redpill's picture

This just means they haven't had enough summits/agreements/Merkozy meetings yet.  The ECB will print eventually in some form, it's only a matter of how many of these bureacratic gyrations they have to go through before Germany finally capitulates.

Mon, 01/16/2012 - 19:38 | 2069681 Triple A
Triple A's picture

Printing will not happen, eurobonds by the end of 2012 will be in order. They are not giving up on the Euro.

Mon, 01/16/2012 - 19:51 | 2069696 DaBernank
DaBernank's picture

Printing has been happening, just look at the ECB balance sheet, 20billion per week. Not printing would actually be giving up on the EUR. German politicians don't realize that money is created when a loan is made, the money has been created over the last 10 years. If the CB does not provide liquidity the asset/debt (same thing) must be destroyed. I'm not saying this is how things should be, I think it's bullshit but that's how it is today in tooth fairy bank land.

Mon, 01/16/2012 - 15:39 | 2069228 walküre
walküre's picture

With Captain Guido Mullet at the helm I'm surprised she didn't crash somewhere sooner.

Mon, 01/16/2012 - 16:36 | 2069344 Mister Ponzi
Mister Ponzi's picture

Hmm, let's see. A ship with a proud name; an Italian captain paid by a US based company; a lot of Italian, German and French passengers on board; the ship hits a rock off Italy and sinks. Does this better describe the ECB or the Costa Concordia???

Mon, 01/16/2012 - 17:46 | 2069484 Ahmeexnal
Ahmeexnal's picture

And they sink off the coast of the island of Gigolo.

Mon, 01/16/2012 - 23:09 | 2070048 Tompooz
Tompooz's picture

"Shipwrecked off the Island of Ponzi" has the right ring to it.

Mon, 01/16/2012 - 15:34 | 2069219 GeneMarchbanks
GeneMarchbanks's picture

Um, you hear what you want to hear in this post-Minksy moment world of ours. You'll get a battered, volatile € or local currencies.

Mon, 01/16/2012 - 15:47 | 2069258 LawsofPhysics
LawsofPhysics's picture

You really believe the printing has stopped?  Not familiar with a liquidity trap are you?  The printing has never stopped and neither has the destruction of capital through misallocation (banker's bonuses and paper-pushing) and debt servicing.  Lots of money being printed, none of it is finding it way to productive ventures.

Mon, 01/16/2012 - 19:38 | 2069682 Bam_Man
Bam_Man's picture

Yes, this is the perfect recipe for stagflation, which is exactly what we see both in Europe and to a slightly lesser extent in the US.

Mon, 01/16/2012 - 15:12 | 2069157 Ahmeexnal
Ahmeexnal's picture

The recent trend in avoiding both the dollar and the euro as currency by many countries who are now trading in their own currency pairs is necessary and sufficient proof that both the euro and the dollar are shackled to a concrete block and plunging to the bottom of the ocean.

Mon, 01/16/2012 - 15:42 | 2069239 walküre
walküre's picture

The Rupee maybe? The Rublette or the Yuan? Let them trade in their own currencies for the time being until they all realize that they cannot trust each other either.

Mon, 01/16/2012 - 15:38 | 2069227 slaughterer
slaughterer's picture

Yet another article where our hero Tyler Duren assumes the only inevitable consequence is QE3.  What if he is wrong?  

Mon, 01/16/2012 - 15:43 | 2069245 GeneMarchbanks
GeneMarchbanks's picture

Not sure anything is being assumed but you'll get notional GDP targeting in the not too distant future. It'll be glorious... for a while.

Mon, 01/16/2012 - 16:44 | 2069363 Hacksaw
Hacksaw's picture

If Europe continues to fall apart, if Asia follows them down, the Fed could be in a position where they either won't or can't QE enough to keep the dollar down. If the dollar goes up and stays up the possibilities could be grim. 

Mon, 01/16/2012 - 15:51 | 2069263 mattu13048
mattu13048's picture

Holy Batman, this is the shit: http://www.spadacapital.com/?articleID=2236

Mon, 01/16/2012 - 15:00 | 2069126 LawsofPhysics
LawsofPhysics's picture

Apparently the plan is to keep levitating here indefinately.  The world is turning Japanese.

Mon, 01/16/2012 - 15:28 | 2069202 redpill
redpill's picture

I really think so... dee duh duh dut dut duh....


Mon, 01/16/2012 - 15:02 | 2069130 agent default
agent default's picture

I think the German game is becoming clear, they are not going to print in order to throw good money after bad like the FED.  They will force the defaults, and allow for controlled printing once the need to recapitalize the system and restart it from a healthy basis arises.

Mon, 01/16/2012 - 15:25 | 2069189 Ropingdown
Ropingdown's picture

Yep.  And the key word is "controlled."  What an encouraging reaction the Germans have provided.  They fought off the Sarkozy-organized gang (Spain, Italy, et al) over the last year.  They did it without going into hysterics.  Quite a calm sensible course of action under the circumstances.

Mon, 01/16/2012 - 16:08 | 2069296 Beastmanager
Beastmanager's picture

The Germans never get it right, do not forget history, Germans are traditionally the biggest enemies of european welfare.

Tue, 01/17/2012 - 00:05 | 2070120 StychoKiller
StychoKiller's picture

welfare == irresponsible, childlike wards of a Nanny State -- just die already!

Mon, 01/16/2012 - 15:48 | 2069131 GeneMarchbanks
GeneMarchbanks's picture

"And yet the market still continues to be convinced that the ECB will print in the convention sense, "just because.''

You hear what you want to hear. Bb walks the walk.  


'France said to seek faster execution of EU's Iran oil embargo, said to seek three-month phase-in sanction'

So they're sticking to the script. Good luck with that.

Mon, 01/16/2012 - 15:03 | 2069133 Irish66
Irish66's picture

Can we have the dove/hawk chart please?  Its hard to keep everyone straight.

Mon, 01/16/2012 - 21:37 | 2069864 UP Forester
UP Forester's picture

Does it matter?

The Bernank still thinks he has more tools on his belt than Flietermausmann....

Mon, 01/16/2012 - 15:03 | 2069134 Kaiser Sousa
Kaiser Sousa's picture

like my mom used say....

"they lyin...."

Mon, 01/16/2012 - 15:13 | 2069158 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It's priced in.

Mon, 01/16/2012 - 15:25 | 2069191 GeneMarchbanks
GeneMarchbanks's picture

Is that your new thing now or are you just muttering to yourself?

Mon, 01/16/2012 - 16:16 | 2069305 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

My new thing?  I heard it on CNBC.  The downgrades are priced in.  They kept saying it over, and over, and over....

Mon, 01/16/2012 - 17:00 | 2069388 MrBinkeyWhat
MrBinkeyWhat's picture

"CNBS"  There fixed it for you.

BTW, "12 Monkeys " is a genuine classic. Whenever I get a little "up beat" I watch it. Clears my mind.

Mon, 01/16/2012 - 15:04 | 2069137 Sudden Debt
Sudden Debt's picture

I didn't ask the germans for their opinion.... SO STFU!

Print like the Americans do and get this stuff over with!
Just wait untill all the pension funds go belly up and old the old farts hit the streets!

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