The @ecb PEPP program is very different from the previous repurchase programs. It allows the ECB all flexibility and in essence it’s a guarantee for the massive deficits that member states will have (1)
In summary, the @ecb is going to sell euros massively at the same time as the Eurozone trade surplus, that keeps the euro stable, collapses (2)
Risking a massive euro devaluation with economic recession that could lead to years of stagnation, the @ecb bet on a V-shaped recovery is very clear. The eurozone non-euro area export growth has been disappointing and losing market share since the launch of QE. (3)
The ECB is leveraging its balance sheet on a very rapid and strong recovery at the same time as member states will massively increase current spending. The fiscal space of the eurozone can be exhausted in a few months if the recovery is not intense and quick.
As more and more local central banks increase liquidity injections and asset purchases, the stealth dollarisation of the world economy is going to accelerate.
