What are all those machines feeding on? A wall of central bank liquidity, that’s what. All those machines “earning” money every single day for their operators have to get that money from somewhere.
As always, I prefer to trust what people do, not what they say. Here’s what Draghi has recently said:
Draghi speaks of ‘strengthening and broadening recovery’ in euro zone, but says stimulus must remain
Jun 27, 2017
“All the signs now point to a strengthening and broadening recovery in the euro area,” Draghi, said recognizing the improvements. However, he argued that the inflation dynamics aren’t solid enough to exit the stimulus program.
“We are still in a situation of continuing slack, and where a long period of subpar inflation translates into a slower return of inflation to our objective. Inflation dynamics are not yet durable and self-sustaining. So our monetary policy needs to be persistent,” Draghi said.
Well if “all the signs” point to a recovering Euro area then “all the signs” say perhaps it’s time to scale back the most aggressive money printing in all of history.
Instead what we saw there at the end of the second quarter 2017 when Draghi was saying those words was the most intense blast of liquidity (money printing) that the ECB has ever conducted.
It’s practically straight vertical!
That looks like emergency printing to me.
So which is it Draghi? Are things recovering or is there some sort of emergency you are not being honest about (coughDeutscheBankcoughcough)?
If we go with actions over words, there’s some sort of emergency. But we’d have to be cynical enough to believe thatan ECB official would lie if it were serious enough.