Please tell me if I get the big picture on #Eurozone #QuantitativeEasing right.
1. The EU is a historical political project
2. The #ECB is a child of that project and understandably protects it until its last breath
3. Protecting it means
a) ensuring no member to go bust
1. The EU is a historical political project
2. The #ECB is a child of that project and understandably protects it until its last breath
3. Protecting it means
a) ensuring no member to go bust
b) sovereign spreads to remain at a managable levels
4. These in turn requires heavy purchases of sovereign bonds, on a scale that can only be done with newly created money #M0 i.e. #QE.
5. That money inevitably blows a bubble on nearly all markets of investable assets
4. These in turn requires heavy purchases of sovereign bonds, on a scale that can only be done with newly created money #M0 i.e. #QE.
5. That money inevitably blows a bubble on nearly all markets of investable assets
6. ...which side effect the ECB does not like but sees no alternative to keep the Eurozone together
7. ECB also needs to keep printing money as #FED is printing money too, and the #EUR would otherwise appreciate, creating huge competitiveness problems for the entire Eurozone.
7. ECB also needs to keep printing money as #FED is printing money too, and the #EUR would otherwise appreciate, creating huge competitiveness problems for the entire Eurozone.
Is that the dynamics of it?
All views welcome.
All views welcome.
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