Yes, the Ure-a-pee’in Central Banksters moved today to make up money, just like the US Fed did and as a result, while we don’t think the end of the world will result, it sure is looking like the EU is in a heap-o-crap. Done dunged by their own bad policies, is how it looks from here.
Quantitative pleasing. $60-billion in round one, but this stuff is like crack. Hard to quit.
From the press conference:
First, it decided to launch an expanded asset purchase programme, encompassing the existing purchase programmes for asset-backed securities and covered bonds. Under this expanded programme, the combined monthly purchases of public and private sector securities will amount to €60 billion. They are intended to be carried out until end-September 2016 and will in any case be conducted until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, 2% over the medium term. In March 2015 the Eurosystem will start to purchase euro-denominated investment-grade securities issued by euro area governments and agencies and European institutions in the secondary market. The purchases of securities issued by euro area governments and agencies will be based on the Eurosystem NCBs’ shares in the ECB’s capital key. Some additional eligibility criteria will be applied in the case of countries under an EU/IMF adjustment programme.
Second, the Governing Council decided to change the pricing of the six remaining targeted longer-term refinancing operations (TLTROs). Accordingly , the interest rate applicable to future TLTRO operations will be equal to the rate on the Eurosystem’s main refinancing operations prevailing at the time when each TLTRO is conducted, thereby removing the 10 basis point spread over the MRO rate that applied to the first two TLTROs.
Third, in line with our forward guidance, we decided to keep the key ECB interest rates unchanged.
As regards the additional asset purchases, the Governing Council retains control over all the design features of the programme and the ECB will coordinate the purchases, thereby safeguarding the singleness of the Eurosystem’s monetary policy. The Eurosystem will make use of decentralised implementation to mobilise its resources. With regard to the sharing of hypothetical losses, the Governing Council decided that purchases of securities of European institutions (which will be 12% of the additional asset purchases, and which will be purchased by NCBs) will be subject to loss sharing. The rest of the NCBs’ additional asset purchases will not be subject to loss sharing. The ECB will hold 8% of the additional asset purchases. This implies that 20% of the additional asset purchases will be subject to a regime of risk sharing.
As suggested by this morning’s high-falutin artwork, we notice a strange tendency of CBs world-wide, who once scorned the financial antics of Zimbabwe’s Robert Mugabe to now be walking down the same path, although in a more leisurely manner as would fit the world’s financial aristocracy of the asylum.
We’ll see how soon they start to QE.
Meantime, Denmark has cut rates to defend the Kroner from attack. Boy, isn’t being in the EU a lot of fun?
Meantime, the US is being the major recipient of “flight to safety” while the end of the worlders are all cowering in their corners talking about sheer idiocy in economics like it actually makes sense or is a fact. No, most of it is theory, all of it is made up, and most of what’s out there is wrong if you just have common sense. But since we don’t anymore…..
A buddy of mine sent me a worry note about Exter’s Pyramid with some concern. So I explained in no uncertain terms how that’s a pantload, but in economics, most people have just enough facts to be easily panicked. He’s now calmed and that becomes a point in Peoplenomics this week, which really oughta be rebranded “sniff-test economics.”
So what does the ECB move to make up money really mean? Follow me here:
This means that the ECB will be trying to inject some inflation into their failing (made up) currency while steam continues to gather behind the “bust the EU up” movement.
This latter will take years to unfold, but the basis of the question is sound: What exactly does Norway have in common with Italy or Greece such that Norwegians should underwrite Greek socialist sins of the past? People forget how close Greece came a couple of times to siding with the Former Soviet Union (FSU) and we all know how that worked out.
Greece has an economic hangover…that that’s how shit rolls when you believe the Free Lunchers long enough. Socialism is the art of leading people astray through platitudes, populism, and crooked thinking. Like we in the US are going through now…
On the other hand, Greece would not have its woes if they had simply taxed the hell out of some of their shipping magnates but again, I repeat myself, it’s all drearily similar to present US directions.
What an ECB QE Means:
- Likely, oil and gas will pop back up – I figure oil to the low $50s.
- Firming of the metals because while all the inflation data says there is no inflation, the goldbugs will continue to tout, not realizing that the HUGE SOCIAL SPENDING of the future when we hit bottom of the Greater Depression is what will spur (at long last) the gold ascension. In the meantime, I’ll be napping.
- Oh, and look for the US markets to head higher because enough WWs (worrywarts) in the EU (as in ewe have to be kidding me) are going to dump money into the US markets because the dollar will soar.
But don’t take the world of the ETNJ (East Texas NutJob) on this. Just watch the future unfold, which should be orderly for another year to three before we get to the skids. Right now, Dow futures are up 120 points.
That’s either a) flight to safety or b) rats from a sinking ship. Net cash flow is indistinguishable.
The EU QE is just foreplay as financial desperados highjack the money train and try to figure out what all these controls in the engineer’s chair really do. The answer? Each distorts free trade between people, but if you have the right friends pulling the right levers, you can get rich, build a bug out compound, and let the world fall apart later.
Just not today.
Ukraine: Here, Hold this Bag for Us
Meantime, Ukraine, which has some fine mineral resources off in the Donetsk Basin and which used to make a fortune or two making machine parts for the Russian military apparatus, and profited from being Russia’s bread basket, is finding out what “coyote ugly” means.
For Ukrainian politicians not familiar with the term (since Ukraine hasn’t been really on the international singles scene in a couple of hundred years), here’s what Coyote Ugly means according to the prestigious bible of foreign policy, the Urban Dictionary, corrected slightly:
A situation encountered after a night of consuming alcohol whereby a person, usually male, wakes the next morning in a strange bed with a sexual partner from the previous evening who is completely physically undesirable (see ugly, nasty, two bagger) and sleeping on the man’s (or woman’s) arm. The hapless male or female would rather gnaw off his or her own arm than wake the woman and have to face the ills of his intoxicated choices the previous evening. Originating from a phenomena whereby a coyote captured in a jaw trap will chew off its own leg to escape certain death.
Fortune this morning has a dandy article about how the Ukrainians are begging the IMF for mercy, apparently not realizing the EU is really Lady Freedom cross-dressed, and begging for mercy from he/her/them/it would be like asking Guido and Luigi in the collections for a break.
Ain’t happening, but if I can ever help the Ukrainian government, just let me know. I’m telling you there’s a rewrite of the classic novel The Mouse that Roared in here for them, but first, they have to decide to be single and stop bouncing from bad relationship to bad relationships.
The IMF is a cross between the Ted Bundy of lending and Gotham (the series) although it takes some imagination to cobble up imagery of Don LeGarde.
Meantime, back on the streets, 8 people were killed in the shelling of a bus in Ukraine…a country being “played” by both sides, which usually ensures a high enough body count to make headlines.
Buying the Presidency
The US just can’t seem to get enough of a bad thing with these Clintons. Poll out this morning shows Hillary has a double-digit lead over any GOP wannabes…
I’m feeling so old.
How old? Old enough I remember when the quality of leadership was what decided elections, not cash flow. But that’s stupid of me, I realize. American political offices are now bought not won.
Painful Lesson of Ferguson
Now that CNN is reporting that the Eric Holder-run Department of Justice will likely not charge officer Darren Wilson up in Ferguson, MO, we wonder what, exactly, was the point of all that divisive racial tension we went through?
The real victims will be the black business owners who ought to be going after the rioters…because of the damage done and the higher insurance costs that will no doubt follow.
Bet you won’t find that idea taking root in in LibMedia…but such action would be justified and might send a message.
More after this…