Watch Live: Mario Draghi Explains Why He Is Ending QE As EU Economy Collapses

We are sure he has good reason - of course he does - but if anyone thinks that Draghi killing QE is anything to do with economic strength or an EU renaissance, think again...

It appears Draghi thinks the worst economic data disappointments in 7 years is the perfect time to end his bond-buying scheme...

 

Watch as Draghi explains his way out of this one...

 

Draghi unveiled the ECB's new GDP and inflation forecasts.

Here one surprise was the big drop in 2018 GDP from 2.4% to 2.1%, while 2019 and 2020 were kept unchanged:

  • 2018 cut to 2.1% from 2.4%
  • 2019 unchanged at 1.9%
  • 2020 unchanged at 1.7%

Even more surprising is that in the ECB's latest HICP inflation forecast, the central bank now expects inflation to be perfectly unchanged for the next 3 years, from 1.7% in 2018 (up from 1.4% previously), to 1.7% in 2019 to 1.7% in 2020.

Comments

Son of Captain Nemo Thu, 06/14/2018 - 08:26 Permalink

But the good news is... He won't be ending it until 2019 (https://www.zerohedge.com/news/2018-06-14/ecb-unveils-end-qe-will-reduc…)!..

Cause there is still the deep seeded maniacal conviction that Brussel's military (https://southfront.org/italian-troops-deployed-alongside-us-and-french-…) will prevail in looting and threatening (https://southfront.org/ukrainian-military-deploys-large-number-of-battl…) everywhere else to get the Western European bank(s) BACK ON TRACK again!!!

Son of Captain Nemo yvhmer Thu, 06/14/2018 - 09:07 Permalink

agree.

And more to your point how many small epoch(s) we've gone through since (3 buildings 2 planes) between 2001 and the bank bailouts 7 years later that we could have started our "rebuilding" without destroying the rest of the Middle East with more borrowed money that was never going to be repaid after this announcement (https://www.youtube.com/watch?v=IVpSBUgbxBU)... That has now turned into this (https://msutoday.msu.edu/news/2017/msu-scholars-find-21-trillion-in-una…) x 10!

In reply to by yvhmer

To Hell In A H… Wild Bill Steamcock Thu, 06/14/2018 - 08:50 Permalink

The Japs have been printing money since the early 90's and the Yen is still mighty, despite carrying unsustainable and unrepayable debt? Then you compare it to countries like Venezuela and their Bolivar has gone to the dogs? Why? How much monopoly money has Draghi printed? He'll stop printing next year so he says, but we all know that decision will be reversed and the markets will pretend like nothing happened. It's complete bullshit.

But if Zimbabwe, a country with less than $8 billion external debt (yes you read correctly *in total* and not for the year, I challenge anybody to VERIFY THIS FACT FOR THEMSELVES) prints money(and when they printed less than $250 million) their currency went to the shitter and this dunce's-cap forum starts to laugh, ridicule and preach economic dogma to Zimbabwe, while having absolutely no fucking perspective in relation to Uncle Scam, whose debt is in over fucking $160 trillion plus. What level of disconnect must exist on ZH, for this to be the reality?

In reply to by Wild Bill Steamcock

To Hell In A H… skeelos Thu, 06/14/2018 - 11:47 Permalink

This was once an economic forum. Now it is taken over by alt-right knuckle draggers, who know hardly anything about economics. What has happened to the concept of income and out goings? I don't care if you can bring my father back from the dead. It may bring me emotional value and I'll be happy, but if your out goings despite your brilliant inventions is far greater than what you generate in revenue, that makes you fucking bankrupt despite your inventive brains. 

This is basic economics and it is frauds and retards like you that allow its twisting, because frauds and fools like you never understood economics in the first place.

You have been brainwashed into believing the mythical GDP figure, other massaged data and a country making stuff, is the source of wealth. I know you subscribe to the belief that a waitress in Cleveland, should be paid more than a waitress in Dakar, or Budapest, because that is what the brainwashing has achieved.

But their is no logic to support this stance apart from constantly repeating these statements. Why is the economic output of a Zimbabwe farmer, valued less than the economic output of a USSA farmer despite harvesting the same yields? Your answer to that question will be interesting.

In reply to by skeelos

SJ158 To Hell In A H… Thu, 06/14/2018 - 10:05 Permalink

Zimbabwe and other shithole countries have no external demand of its currency(debt) to pick up the slack from its debt monetization. Not to mention that the US holds reseve currency status for the dollar.

Any mismanegment is quickly felt as people try to get rid of whatever toilet paper those governments force onto them, unlike rich countries that leech of much bigger pool of resources to pay back real interest. 

What matters for debt economics is the ABILITY to pay back(ability to tax), which those shit countries have none.

Zimbabwe and other shit countries lack savings and real capital, produce too little. They have restricted access to imported goods, which for example the US consumer can easily pick up. In short: they have shit for supply but still try to artifically create demand like they are the United States.

Zimbabwe has recently redistribruted land to black unproductive people, disrupting supply chains and going from exporter of food to foreign aid bum.

By the way, QE has generated massive asset price inflation that has spread to real markets, dont trust official inflation numbers.

In reply to by To Hell In A H…

Leguran To Hell In A H… Thu, 06/14/2018 - 11:40 Permalink

Ok, so Zimbabwe printed $250 million, then why is it they printed and circulated notes of 100Trillion Zimbabwe dollars. I have one of these. Since fiat money is a claim on production, I suspect there is a connection between the amount of money in circulation and the goods and services produced (I am a bit old fashioned and still believe in supply and demand.) Total amount of money printed does not connect with the use of the money or the honoring of the claims on production. As for the US dollar, if the printing just goes into mattress covers it does not affect the amount in circulation. Right now the FED faces the problem of mattress cover money (excess bank reserves) escaping the sterilization program (banks earn more by lending than leaving it in excess reserves). One should consider that perhaps it is not the economy that is over heating but the breakdown of the policy of sterilization of all those trillions parked in excess reserves that is causing the FED to raise interest rates.  

In reply to by To Hell In A H…

Offthebeach Thu, 06/14/2018 - 08:35 Permalink

I recall reading a book on pre Adam Smith economics, and the convolutions of various Catholic and others edicts ...These CBankers really are less than clowns.  They are net destructive, at best.

Wild Bill Steamcock Money_for_Nothing Thu, 06/14/2018 - 09:08 Permalink

"First Council of Nicaea forbade usury", good.
Central bank setting interests rate to zero. Bad?

First Council forbade usury, to prevent economic problems.

CB setting interest rates to zero, to reverse economic problems to which interest rates contributed.

 

Good post, but I don't think I stepped on my d*ck yet.  Let me know otherwise, ;-)

In reply to by Money_for_Nothing

Let it Go Thu, 06/14/2018 - 08:44 Permalink

This most likely signals a stronger dollar which will act like a magnet pulling wealth towards America and away from countries already having problems. If this turns into a self-feeding loop the dollar may soon get much stronger.This could be a real problem for countries that are mired in debt if that debt is tied or pegged to the dollar. This will translate into a lot of economic pain if the dollar grows stronger and many will find themselves under a great deal of pressure just to survive. More on this subject in the article below.

 http://Stronger Dollar Is A Problem For Global Growth.html

runningman18 Let it Go Thu, 06/14/2018 - 08:56 Permalink

A stronger dollar (which is a relative concept) does not necessarily mean wealth will be flowing to the US.  The Fed is cutting stimulus support and raising rates here too, you know, which means declining stocks, stagflation and unsustainable corporate and consumer debt.  It's way more likely all the "wealth" will be flowing East in the long run, not to the US.   

In reply to by Let it Go

MarcusAurelius Thu, 06/14/2018 - 08:50 Permalink

When central banks control just about every market what makes anyone think they will end anything. Perhaps in word but certainly not in action. They all work together behind the scenes to stop contagion in any developed country. If risk surfaces, miraculously a shadow company steps in with bail out money or buying stocks or whatever it takes. Don't delude yourselves the free market system is gone forever. 

Aleedsfella Thu, 06/14/2018 - 09:29 Permalink

So Rothschild just pushed the first domino, that will economically take out half of Europe. That fat bitch is warming up her voice again, Europe has become all about England, Germany and France again! I have seen the trailer for this!