I think it is obvious to even the casual observer but I thought I would take the time to point out the fatal flaw in his strategy.
The key words is “sterilisation”.
To sterilize the bond purchases, the ECB will remove from the system elsewhere the same amount of money it spends, ensuring the program has a neutral impact on the money supply.
And that simple sentence outlines the fall of the Eurozone.
The ECB have pledged to lend money to governments through bond purchases, also known as money printing and yet the plan is not to increase the amount of Euros in existence.
I cannot be the only person to realise this, but if the amount of money in existence stays the same but governments are getting a bigger slice it must mean that the amount of money available in the private sector through loans will decrease.
I am positive this is something that even a five-year old would realise and yet stock markets around the world are rejoicing at this news, apparently ECB bond buying is going to “save” the Euro.
Sure, it may save the Euro but at what cost?
The economies in the Eurozone will still exist, the Euro will still exist, the only problem being that the governments will be the Eurozone economy.
It’s a template for a communist/fascist takeover if ever I heard one.
Of course if a five-year old understands the end game of such a policy so must the powers that be at the ECB so what is their long terms strategy?
One can only assume that this sterilisation of debt is simply a step towards full-blown money printing, a gentle introduction to the idea for the Bundesbank if you will.
Of course the Bundesbank must also realise the precedent that is getting set here by the ECB monetizing government debt which begs the question why did Germany get involved in bailing out countries like Greece in the first place? Did they not forsee where it would lead?
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