Friday, 22 September 2017

ECB

Unintended Monetary Policy Effects – Tale II: ECB Crisis Policies

July 16, 2017
in Blog

The Federal Reserve’s (Fed) and European Central Bank’s (ECB) policy responses to the recent financial disasters offer two tales of unintended consequences. Our previous post outlined the undesired effects of the Fed’s policies. In this post, we suggest that the ECB’s stabilization policies did not only fail to achieve its goals. Monetary policy has also […]

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The European Central Bank on Bitcoins

Posted by Gonzalo Schwarz
November 2, 2012
in Blog

by Robert Wenzel I have finally had a chance to read in full the unsigned report by the European Central Bank that I mentioned earlier this week. The report is quite impressive.The report clearly states the advantages of Bitcoins versus current credit/debit cards: Firstly, transactions are anonymous, as accounts are registered and Bitcoins are sent […]

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Central Bank Policy Leaves Tidal Wave of Money on Horizon

Posted by Gonzalo Schwarz
July 25, 2012
in Blog

David Ignatius at WaPo has written an opinion piece which warns that the American and European Central banks have been “forced” by complacent and cowardly politicians into pumping money into the economy – to keep the economy afloat – because politicians have been unwilling to commit to the austerity and deficit reduction necessary to tackle […]

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Something is Rotten in the State of Denmark

Posted by Gonzalo Schwarz
July 5, 2012
in Blog

Central Banks Helpless As Denmark Goes NIRP, Cuts Deposit Rate To NEGATIVE 0.2% From ZeroHedge.com: A few days ago we noted that the ECB may well be contemplating the monetary neutron bomb, which would see it lower rates to below zero, ushering in a Negative Interest Rate Policy. Today, Mario Draghi cut such speculation short promising the […]

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The Euro Titanic Has Hit the Iceberg

Posted by Gonzalo Schwarz
June 13, 2012
in Blog

Mutually Assured Financial Destruction “Under the deal, the Italians have to lend to the Spanish banks at 3%, but to get that money they have to borrow on the markets at 7%! It’s genius!” It’s Nigel Farage, back again. Enjoy! image: flickr.com/ericconstantineau

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Time Bomb? Banks Pressured to Buy Government Debt

Posted by Gonzalo Schwarz
June 1, 2012
in Blog

“It’s not printing money, it’s ‘borrowing‘ money! See! We’ve totally learned from the mistakes of the past! This time it will be different!” by Jeff Cox US and European regulators are essentially forcing banks to buy up their own government’s debt—a move that could end up making the debt crisis even worse, a Citigroup analysis says. […]

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Alasdair Macleod: All Roads In Europe Lead To Gold

Posted by Gonzalo Schwarz
May 24, 2012
in Blog

Submitted by Chris Martenson This week we bring back Alasdair Macleod, publisher of Finance and economics.org, because, as he puts it “every horror that we discussed last time we spoke is coming about”. Especially scary since our previous conversation with him was less than three weeks ago… Today’s interview continues building on his excellent synopsis from last month that detailed the […]

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The Golden Rule Reinterpreted

Posted by Gonzalo Schwarz
May 15, 2012
in Blog

  by Peter Schiff In an April speech in Berlin, Dr. Andreas Dombret, a member of the Executive Board of the Deutsche Bundesbank (the German central bank), offered a startlingly frank assessment of the current problems in Europe. Although his comments were meant to apply to the tensions and imbalances that exist between the northern […]

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Is There No Escape from the Euro?

Posted by Gonzalo Schwarz
April 27, 2012
in Blog

by Philipp Bagus As I discussed recently, the costs and risks of maintaining the eurozone system are already immense and rising. So is an exit possible? Intuitively, the exit from the euro should be as easy as the entrance. Joining and leaving the club should be equally simple. Leaving is just undoing what was done before. Indeed, many popular […]

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Taxes: The Seen and the Unseen

February 27, 2012
in Blog

If an inflation tax falls in the forest, and not one in a million understand it, does it make a sound?[1] According to a recent news report by Reuters, “President Barack Obama called on Monday for new spending to boost growth and higher taxes on the rich, laying out an election-year vision for America in […]

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European Budget Pact: Right Diagnosis but Wrong Tool?

January 4, 2012
in Blog

Other than Germany and France the European countries seem to be in a holding pattern following the agreements between Germany and France. These two countries seem to be driving the crisis and the future of the Euro. After saving the Euro more than once, the last summit made clearer the two paths that Europe may […]

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What the Price of Gold Means

Posted by Tyler Watts
December 19, 2011
in Blog

It’s amazing how so many people don’t get gold. It’s only been 40 years since the dollar was completely severed from it’s once proud golden heritage, yet most finance and econ people are wont to consider gold just another commodity—and a not very “useful” one at that. Thus they speak of “investing” in gold as […]

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ECB Vows to Prevent Organizations Initialed “ECB.” Fails Immediately.

Posted by Gonzalo Schwarz
December 16, 2011
in Blog

…Then, upstaged by some cartoon ducks. Cartoon European Central Bank representatives do battle with the inflation monster, in a cartoon produced by the ECB.  Now, let us get this straight: The ECB creates a monster, then purports to fight it all the while it lives in their offices, and then explains this in terms meant […]

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The Gutenberg Solution

Posted by Tyler Watts
December 5, 2011
in Blog

The European Monetary Union is evolving like a slow-motion train-wreck these days. Just a few weeks ago, the pundits and bloggers began to ponder the possibility of the Euro failing, and now many are claiming that this is all but inevitable (the Economist provides a sobering assessment; an even more sobering assessment in the Financial […]

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The Lenders of Hazard

November 25, 2011
in Blog

The following passage in a note at The Economist points out to the well-known problem of moral hazard with lenders of last resort. But the moral hazard problem affects more than just the financial institutions: The European Central Bank (ECB) rejects the idea of acting as a lender of last resort to embattled, but solvent, […]

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Business Cycles, Open Economies and Wandering Bubbles

November 7, 2011
in Blog

In a previous post we commented on some aspects that are relevant for business cycles in the context of open economies. We also showed that in not a few cases the Mises-Hayek theory of business cycles is offered as an explanation of what went wrong. Even though business cycles have multiple causes and issues going […]

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“Gold is NOT money!.. But, can we have yours to pay our bills?”

Posted by Gonzalo Schwarz
November 6, 2011
in Blog

“NEIN!  But take all zee paper you wish…” (Reuters) – Germany on Saturday rejected media reports that Bundesbank reserves would be used to fund the euro zone’s rescue facility after German newspapers said Group of 20 leaders had discussed the idea of tapping central banks. The Frankfurter Allgemeine Sonntagszeitung (FAS) reported that Bundesbank reserves — including foreign […]

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“ECB Cannot Tailor Monetary Policy to Individual Countries” – FT

Posted by Tom Duncan
March 30, 2011
in Blog

“The benefit of maintaining price stability in the eurozone as a whole, and thereby keeping the inflation risk low, becomes even greater in times of crisis. At the height of the financial crisis, the ECB lowered interest rates aggressively in the face of downside risks to price stability. To the extent that these risks tilt […]

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“Fed Officials Past and Present: ‘They Did It'” – Seeking Alpha

Posted by Tom Duncan
March 7, 2011
in Blog

“Lately, that seems to be the message coming from current and past Fed officials regarding the housing and credit boom in the early-to-mid 2000s. First Ben Bernanke, then Vincent Reinhart, and now Janet Yellen have come out saying it was excess savings by foreigners and failings in the U.S. private sector that was the root […]

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“Oil Spike May Drive Fed, ECB Split”

Posted by Tom Duncan
February 28, 2011
in Blog

“The US Federal Reserve and European Central Bank may go their separate ways if Middle East unrest provokes a sustained, inflationary oil price spike. Crude prices creeping back into the triple digits have sparked concern about slower economic growth and will no doubt reignite two long-running monetary policy debates: Should central banks have a single […]

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“German States Point to Inflation Above ECB Target” – LA Times

Posted by Tom Duncan
February 25, 2011
in Blog

“Inflation sped up in five German states in February, buoyed by soaring energy costs, a sign that price pressures in the euro zone could continue to accelerate above the European Central Bank’s target. Prices in North-Rhine Westphalia (NRW) — Germany’s most populous state — were 2.1 percent higher than a year ago, up from 2.0 […]

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“Global Price Fears Mount” – WSJ

Posted by Tom Duncan
January 24, 2011
in Blog

“Mr. Trichet argues that budget discipline would help growth in Europe more than renewed stimulus, and called on the euro zone’s 17 member countries to strengthen “surveillance” of each other’s fiscal policies. In Europe, budget discipline benefits growth and job creation by “improving confidence of households, enterprises, investors and savers,” said the 68-year-old Frenchman. In […]

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“ECB Intervenes As Debt Crisis Deepens” – Financial Times

Posted by Tom Duncan
January 11, 2011
in Blog

“The European Central Bank intervened to prop up the eurozone bond markets on Monday as political leaders and bankers warned the debt crisis was deepening amid fears Portugal was edging closer to an international bail-out. Although European Union officials denied they were talking about a bail-out for Portugal, the ECB had to buy the country’s […]

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“Eurozone inflation soars to new high”

Posted by Tom Duncan
January 4, 2011
in Blog

“Eurozone inflation rose in June to its highest since the bloc’s 1999 formation, data showed on Monday as political opposition mounted to an expected European Central Bank move to raise its main interest rate this week. Prices were 4 per cent higher in June than a year earlier, twice as high as the ECB’s inflation […]

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