Draghi, we have a problem.
The European Central Bank's balance sheet has reached a new record high this week - surpassing the chaotic expansion peak in 2012 - as Mario Draghi prepares to unleash TLTRO-II, which will definitely increase this time (just like LTRO and NIRP didn't!)
"Fool me once" in 2011/12 but not in 2015/16.
Given the utter failure to create any 'real' economic gains via the expansion of the ECB balance sheet, the plunge in stock prices (and thus crushing the trickle-down wealth-creation mandate) leaves Draghi in the same boat as Yellen - utterly impotent.
Which is ironic because this is what Draghi just said...
- *DRAGHI SAYS ECB ACTION PUT RECOVERY ON MORE SOLID FOOTING
- *DRAGHI SAYS GROWTH, INFLATION WOULD BE LOWER WITHOUT ECB ACTION
Though we'll never know, can you imagine just how bad things are in reality?