{"id":27980,"date":"2017-11-15T07:15:56","date_gmt":"2017-11-15T12:15:56","guid":{"rendered":"http:\/\/olduvai.ca\/?p=27980"},"modified":"2017-11-15T07:15:56","modified_gmt":"2017-11-15T12:15:56","slug":"is-there-a-way-out-of-the-ecbs-trap","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=27980","title":{"rendered":"Is There a Way Out of the ECB&#8217;s Trap?"},"content":{"rendered":"<header class=\"wrapper entry-header page-header\">\n<div class=\"title-with-sep single-title\">\n<h3 class=\"entry-title\"><a href=\"http:\/\/www.cobdencentre.org\/2017\/11\/is-there-any-way-out-of-the-ecbs-trap\/\">IS THERE ANY WAY OUT OF THE ECB\u2019S TRAP?<\/a><\/h3>\n<\/div>\n<\/header>\n<div class=\"wrapper\">\n<div class=\"grids\">\n<div class=\"grid-8 column-1\">\n<div class=\"single-box clearfix entry-content\">\n<div class=\"body-content clearfix\">\n<p>&nbsp;<\/p>\n<p>The ECB faces the Devil\u2019s Alternative that Frederick Forsyth mentioned in one of his books. All options are potentially riskly.\u00a0Mario Draghi\u00a0knows that maintaining the so-called stimuli involves more risks than benefits, but also knows that eliminating them could make the eurozone deck of cards collapse.<\/p>\n<p>Despite the massive injection of liquidity, he knows that\u00a0he can not disguise political risks such as the secessionist coup in Catalonia.\u00a0The Ibex reflects this, making it clear that the European Central Bank does not print prosperity, it only puts a floor to valuations.<\/p>\n<p>The ECB wants a weak euro.\u00a0But it is\u00a0a game of juggling to pretend a weak euro\u00a0and at the same time a strong economy.\u00a0The European Union countries export mostly to themselves.\u00a0Member countries\u00a0sell more than two-thirds of their goods and services\u00a0to other countries in the eurozone.\u00a0Therefore, the more they export and their economies recover, the stronger the euro, and with it, the risk of losing competitiveness.\u00a0The ECB has tried to break the euro strength with dovish messages, but it has not worked\u00a0until political risk reappeared.\u00a0With the German elections and the prospect of a weak coalition, the results of the Austrian elections and the situation in Spain, market operators have realized \u2013 at last \u2013 that the mirage of \u201cthis time is different \u201cin the European Union was simply that, a mirage.<\/p>\n<p>A weak euro has not helped the EU to export more abroad.\u00a0Non-EU exports from the member countries\u00a0have been stagnant since the monetary stimulus program was launched, even though the euro is much weaker than its basket of currencies compared to when the stimulus program began.\u00a0The Central Bank Trap, which I explain in my new book.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>IS THERE ANY WAY OUT OF THE ECB\u2019S TRAP? &nbsp; The ECB faces the Devil\u2019s Alternative that Frederick Forsyth mentioned in one of his books. All options are potentially riskly.\u00a0Mario Draghi\u00a0knows that maintaining the so-called stimuli involves more risks than benefits, but also knows that eliminating them could make the eurozone deck of cards collapse. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[122,7380,16957,233,280,282,284,285,1044,534],"class_list":["post-27980","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-bank","tag-cobden-centre","tag-daniel-lacalle","tag-ecb","tag-euro","tag-european-central-bank","tag-european-union","tag-eurozone","tag-mario-draghi","tag-monetary-policy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27980"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27980\/revisions"}],"predecessor-version":[{"id":27981,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27980\/revisions\/27981"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}