With one day to go until the European soap opera hits its peak, and with the ECB doing all it can to spread disinformation and sow discord and disunity between Germany and everyone else on both the ECB governing council and everywhere else, Germany has decided to again make it clear just where it stands on the topic of hyperinflation and other printing matters:
- FUCHS WARNS THAT ECB BOND PURCHASING COULD LEAD TO INFLATION
- GERMAN LAWMAKER FUCHS, MERKEL ALLY, SPEAKS WITH BLOOMBERG TV
- CDU'S FUCHS SAYS AGAINST EXCESSIVE ECB BOND PURCHASING
- FUCHS WARNS THAT ECB BOND PURCHASING COULD LEAD TO INFLATION
- CDU'S FUCHS SAYS 'QUITE POSITIVE' SPAIN, ITALY WILL IMPROVE
- GERMAN COURT LIKELY TO BACK ESM, CDU'S FUCHS SAYS
And the punchline:
- ECB'S DRAGHI DOESN'T HAVE 'TOO MUCH' SUPPORT FROM MERKEL, MERKEL BACKS WEIDMANN
- ECB CAN ONLY BUY BONDS ATTACHED TO CONDITIONALITY
Which once again goes back to the simple argument: unless Draghi has the full explicit support of Europe's paymaster, anyone hoping for anything definitive, and bazooka-like, will be certainly disappointed.
But wait, there is much more. Readers may recall that yesterday one of the articles we pointed out came from Dutch Dagblad [13] which suggested that it was Weidmann who was isolated on the ECB governing council, and that the Dutch member of the ECB council Klass Knot as well as all other members was "for buying government bonds of Southern European countries." Well, prepare to be shocked, because what kind of soap opera would it be if it wasn't for unexpected narrative plot lines. Today, Frankfurt-based Market News reported precisely the opposite, and not only is Knot on the same side as the Germans, but so are virtually all the other "virtuous" European countries, aka the non-beggars.
From Market News:
The primary divide on the Governing Council of the European Central Bank is not between Bundesbank President Jens Weidmann and ECB President Mario Draghi, as the public supposes, but rather between the heads of the Dutch National Bank and the Bank of Spain, according to an article in the Financial Times Deutschland on Wednesday.
The FTD reported that while Weidmann, in the words of unnamed sources, will vote against bond buys “in any case,” it is Klaas Knot from the Netherlands who is marshalling other skeptics to attach as many conditions as possible to the purchases.
Bank of Finland Governor Erkki Liikanen and Belgian National Bank chief Luc Coene are among those in his camp, the paper said.
Meanwhile, Spain’s Luis Linde leads a majority of Council members in favor of implementing a sovereign debt purchasing program quickly and with as few conditions as possible, the FTD reported.
Italy is clearly on Spain’s side, while France also harbours sympathy for their position, the paper said.
Draghi himself is in the middle, determined to keep the Eurozone intact at almost any price but unwilling to intervene in markets in a way that would lead to what the paper called “systematic government financing.”
How droll: when stripped of its apolitical mask, the ECB is split along the lines in the same way as Europe's politicians: the broke and the solvent, and to nobody's surprise the broke want endless bailouts from the solvent, i.e., unconditional money printing which will result in inflation hitting the solvent, while the solvent won't hear about it unless the broke subject themselves to being controlled by the solvent.
And so we are back to square one.