ECB Euro QE Won’t Succeed
The European Central Bank (ECB) leaked the information beforehand to test the waters and this time followed through on their promise: Money printing galore in the form of 60 billion euros per month ($69 billion).
ECB president Mario Draghi has been talking about it since 2012 and now finally got the go ahead to boost the ECB’s balance sheet from a measly $2.6 trillion by at least another $1.15 trillion by September of 2016. The Fed’s balance sheet is $4.4 trillion.
What do they want to achieve with this? Inflation (ever hear anyone complain about falling prices?) and economic activity. The old argument for QE, which was to calm financial markets, is clearly not needed anymore as volatility for pretty much every asset class on the planet—apart from oil—is at an all-time low.
But are they going to succeed? And how are they going about it? Let’s look at the second question first.
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