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Just Say Nein - Bundesbank On European QE: "Abandon The Idea Once And For All"
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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US corporations can't afford to let the Euro collapse; the US sheeple would love it: they could TRAVEL to Europe again which for the past 10 years has been the playground of US corporate executives keeping their Euro income in Euros. Soon as Greece has the Drachma, I'm packin' for Santorini.
Pack your Nomex marble-bag for the beach. I heard Pele (or Vulcan, or whoever) is rumbling again, and the last one was a bitch....
"Carl-Ludwig Thiele, said that "Europe must abandon the idea that printing money, or quantitative easing, can be used to address the euro zone debt crisis.."
Holy brain-teaser quiz question Batman..
..has Germany gone Icelandic for a New Years resolution?
Nah, they're no saints. For now, they would like nothing more than this mode of operation:
1. stable prices (makes consumers placid, plus it's some kind of german tradition.... german culture at it's soul, is introverted.... that among many things includes a defenstive, conservative and conformist attitude (the later is why there still is no civil war in germany, in spite of the circumstances).... it also includes those things that form the international perception of the german psyche: reliability, sturdiness, strength.
2. If we want to sell out our population.... pardon, i mean boost f****** GDP, multinational exports and pseudo low-wage high-workhour jobs, by engaging in a price war with our neighbours.... well, contrary to what americans and banksters think.... we don't actuall need to print for that.... we can just put the workforce under psycho-terror and if that doesn't suffice, accidentally let in rock-bottom foreign workforces.... to get wages down, and thus engage in the price-war, that bancrupted the EMU PIIGS (and the german population too, but they don't matter). Basically, we don't need to print, just to enslave ourselves, and indirectly our neighbours.
So, as for that printing thingie.... it only is really neccessary, for bailing out lost cases..... things that aren't actually fixable without changes, and where the entire point is simply throwing money at it.
i think Tyler is out of touch. the ECB is engaging in QE. they are lending money to banks which are then purchasing government bonds. voila. and wait until the February tranche hits. and there is one thing they are forcing in Europe that the US is going to get a mighty wake up call on. Fiscal discipline and government spending cuts.
everyone that has spent what they can't afford will get their day in the sunshine.
Wait until they have to pay back the FX Swap.
Is that kind of like when they let the water out of Warren Buffet's bathtub, we'll see who is bathing naked?
OT:
http://maxkeiser.com/2012/01/16/as-mf-global-was-falling-apart-the-customer-accounts-and-what-remained-of-the-customer-money-was-divided-up-among-fcms-in-good-standing-with-clearinghouses-mainly-cme-and-regulators/
My question: When does the wholesale fraud on the international level start? LOLZ. No, I'm not actually trying to make a joke even though obviously the fraud is epidemic.
What I mean, is when does this come to a head, where ponzi money simply appears from places other than central banks' published balance sheets.
The only answer is more printing. More printing is off the table. Ergo, more printing happens in secrecy. Either they pony up their gold, or they pony up their fiat, or they print their own on their inkjets. It's gotta happen, and will it cause a hand-wringing scandal, or will it implode the world economy?
I like your thought experiment. When the confidence is lost in THEIR game, the people will have a chance to be free and THEY will not be able to keep earning the fruits of our labor.
http://www.doctorhousingbubble.com/
actually germans are afraid of running out of ink - the previous experience with weimar one-side painted marks is a good reminder
http://www.rarecoincollector.net/index.php?main_page=product_info&cPath=...
"Let us first get one thing out of the way; the Canadian housing bubble will burst. Just like real estate bubbles in Ireland, Spain, England, and the United States real estate bubbles do burst. Timing is always hard to predict but undoubtedly these bubbles pop because they are fueled by easy and hot money. Even at the apex here in California arguments were bandied around regarding foreign money, low interest rates, and other nonsense trying to support a ludicrous bubble. Once the ego was put on the shelf and the credit markets imploded, the housing market came crashing down. Canada seems to be where the United States was in 2007. Let us examine a couple of charts..."
http://www.doctorhousingbubble.com/canada-housing-bubble-ripe-for-poppin...
I don't like the looks of this.
There will be printing, it is only a matter of pre or post-deafault. Germany may exit the Euro prior to printing of couse.
+1
Printing is the only option.
The other one is collapse.
The path of least resistance is printing.
They will print.
I have a REALLY GREAT printer. Can I get in on this? Huh? Sounds like a really good scam.
And printing leads to collapse.
The path of least resistance is a bigger lie than the cake.
You can't burn cedar. It has to come out at the roots.
yeah and the difference between the two is that pre-default printing would be in euros and post-default in national currencies
What about swaps with cousin Ben? Are they "denying" that as well??
revolution number nein
http://www.youtube.com/watch?v=LVf5Cr4M-F8
Conventional VS unconventional. The difference is?
This is crap. The Euro kids were addicted to lies offered by sociopath politicians supported by mind numb populations.
End of the day is that ass, gas, or grass, NOBODY rides for free.
Socialism/Communism has failed to achieve scale again. And as in every previous instance, we all suffer the consequences of attempting to avoid reality. Why people fail to grasp this is the regimes greatest power. The #1 thing they want for you to NOT understand is that it is their very construct that fails. It began and it will end with who names money.
Do the followers of JM Keynes really know, in their heart of hearts, that money printing is theft of private wealth by dilution? Or do they think they are free to print as much money as they like as long as they don't overdo it, as if only inflating by 2% per year forever is not theft but more than 2% would be.
Funnily enough Keynes was a monetary economist - try reading Treatise on Money before spouting inane gibberish. Sometimes I wonder if people posting such wild statements actually know any Economics beyond what they read on milk cartons
Inflation is theft. No gibberish in that assertion. None. Is it inane?
Keynes was a monser. If we had no Keynes, we would have had no
Kissinger, Nixon, Stormin' Norman Sheisskopf (and his father), Obama, Trilateral Commission, Council on Foreign Relations, et cetera , et cetera.
Do you want the lies and wars to stop? Stop the deficit spending vis-a-vis Keynes.
END FIAT MONEY FOR ONCE AND FOR ALL. Throw it in from whence it came: the fires of Mount Doom.
Actions speak louder than words. Anybody think the Germans don't know the art of the bold-faced lie?
I expect the Germans object to QE as sincerely as the Fed is committed to low inflation and the U.S. Treasury to a strong dollar.
I thought it was well known that they already are printing behind the scenes?
German central bank says no QE, Bernak says I'll buy your bonds to provide liquidity to our euro brothern... there's no inflation over here!
"just because"......wasn't that an old add for Modess/Tampons or something? Re the EU farce going on: good luck herding cats.
Delete
So, now Germany issues thunderous pronouncements from the Throne of Hypocrisy. No, the ECB can't just print currency and undermine the "stable currency". No, it's better yet to just let the Federal Reserve do the printing and just send over a Trillion, or so. The ECB won't print the dirty fake money itself, but it isn't beneath them to grab a double handful of corruption from across the sea. This is a whole new level of chutzpah.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
And.....THAR SHE BLOWS....
ES out of the gate a whopping -1.7
It doesn't have to be real to be real, evidently.
In the end, what can Germany really do? The ECB can and will print. They are already doing it. I am a little baffled by the posturing. I suppose the German govt. wants to be able to say, "See what happens when you print...I told you so!". But so what? If it results in pain eventually, why not pain now? This whole operation is painful to watch and even more painful to experience. I am pretty much resigned to (what I believe is a fact) less material wealth for western nations and less influence. I would rather see a reshuffling sooner than later. I have alluded to this before, but I will say it outright now. If you don't have food storage, you might want to put something together now. Unless you have PM's, you won't be able to afford a loaf of bread by the time these bastards are through.
I can't read German but I do understand it's
GOLD BITCHES!!!:)
Tyler thanks for the article, I do agree with the direction of your article and your statement, the market still continues to be convinced that the ECB will print in the conventional sense, "just because”.
Our times are best understood through the lens of bible prophecy. So, I will continue along the lines of recent past comments.
Sovereign insolvency will spread from the EU periphery to the EU core. The loss of debt sovereignty will be a catalyst for the formation of a European Super State based upon unified fiscal rules. Bank failures and EU Treasury auction failures, will be some of the defining issues of the year. These will cause leaders to meet in summits, waive national sovereignty, establish a unified federal authority, mandate a European fiscal union, and establish either the ECB or the Bundesbank, that is Buba, as the Euro’s Bank.
This concept is totally alien to Austrian economists and to Bundesbank board member, Carl-Ludwig Thiele.
In the supranational New Europe, national sovereignty will be seen as a relic of a bygone era. Europe’s Sovereign will have have EU wide sovereign authority. The people will be amazed by this, and place their faith and trust in him; they will give their allegiance to both the Beast regime of Neoauthoritarianism, Revelation 13:1-4 and the Sovereign’s diktat, Revelation 13:3-4.
What sovereign, one might ask?
The one that God has appointed from eternity past. This Little Horn, or Little Authority, Daniel 7:25, will work behind the scenes in regional framework agreements to change our times and laws to provide order out of the chaos from a soon coming credit breakdown and financial system collapse.
He will mandate sweeping economic and political changess; and the existing rule of law will be replaced by his word, will and way, Revelation 13:5-10, as the First Horseman of the Apocalypse, the rider on the white horse, who has a bow without any arrows, Revelation 6:1-2, is effecting a coup d etat in the Eurozone by transferring sovereign authority from nation states to sovereign leaders and bodies.
So where will Germany be? It will be in charge of the Euro Super State as te Sovereign Lord God, Psalm 2:4-5, is acting to bring forth a revived Roman Empire, that is a German led Europe.
More bible prophecy is found in my article The Time Of Jacob’s Trouble Has Commenced http://tinyurl.com/6pptlqw
Ricardian equivalence vs. Keynes
There's a BIG cultural difference here... The USA has a "can-do" and "spend now, think later" attitude, and the USA bombs its way out of debt - eventually.
Germany has a prudent attitude and has seen what inflation can do and will NOT go back there.
Germany wants Europe to work its way out of the hole that they are in - austerity, nationalization of banks and haircuts. The USA wants to hyperinflate and bomb - as there is no way the USA can work its way out of their hole.
The REAL issue is and has been the situation of the USA and it's time we stop repeating the MSM and focus on the REAL problem.
Increased printing is happening at the ECB.
But when did this start? It started after the important countries Germany, France, Italy and others agreed on something like a Fiscal Union. A few weeks ago. It started when Monti and Draghi come to power. And Merkel is trusting these two and is backing their actions. Merkel promised, that once the Fiscal Union is established then Eurobonds can be introduced. The UK represented by Mr. Cameron is pissed off, because for the UK in its present form a Fiscal Union is not an option. Maybe once Scotland is independent he will think different. So UK is out and the rest of the EU is introducing a Transaction Tax on financial services, thus shrinking the power of Wall Street/London to rigg the markets via HFT.
Merkel can not write a blank cheque for the rest of Europe without the Fiscal Union. Euroland is bound for a fiscal union, which I expect is going to be introduced this summer. After the French elections in March, Germany, Italy, France and the rest of Euroland will proclaim it and introduce then very quickly. Eurobonds backed by a Fiscal Union called Euroland seems to me the only way for the ECB and Europe to avoid the collapse of the system and to avoid the death of the Euro through hyperinflation.
So its true Eurobonds are the only solution to avoid the collapse but, and this is the good thing it forces fiscal discipline upon all of Euroland. The crisis is uniting Europe. Recession is coming anyhow, but recession plus the collapse of Euro is then not anymore in the cards in my opinion.
In the US its much worse. There the double whammy seems unavoidable. Recession plus Dollar kaputt. Its hard to imagine a more difficult situation. But everything has two sides and this is where the hope is. A total collapse is usually washing away the old structures and gives the chance to build something newer and better. The older ones and the retirees are going to be hit hardest, while the younger ones will have left this mess behind within 5 - 10 years.