{"id":31709,"date":"2018-02-28T10:11:35","date_gmt":"2018-02-28T15:11:35","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31709"},"modified":"2018-02-28T10:11:35","modified_gmt":"2018-02-28T15:11:35","slug":"draghi-admits-he-cannot-stop-buying-govt-debt","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31709","title":{"rendered":"Draghi Admits He Cannot Stop Buying Gov\u2019t Debt"},"content":{"rendered":"
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Draghi Admits He Cannot Stop Buying Gov\u2019t Debt<\/a><\/h3>\n<\/div>\n
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\"\"<\/a>Draghi has realized that he has singlehandedly destroyed the European bond market. Besides the fact that it is illegal to short government bonds, he has come face to face with the stark reality that IF<\/strong> the ECB stops buying government bonds,\u00a0there will be NO BID<\/strong>at these price levels. Interest rates will skyrocket dramatically. On the German 10-year bond, once we see a monthly\u00a0closing above .79, we are looking at a DOUBLING<\/strong> of rates and that is in Germany. Once rates rise above 1.55, then expect it to rapidly DOUBLE<\/strong> again.<\/span><\/p>\n

Consequently, Mario Draghi has been warned there is a serious problem. He told the Economic and Monetary Affairs Committee of the European Parliament that he would maintain a very loose monetary policy because it was necessary<\/strong> despite the upturn in the euro area.<\/span>\u00a0He said that INFLATION<\/strong>\u00a0remains critically dependent on a strong push using monetary policy. Of course, you would assume that after 10 years of this policy and there is no sign of a major return of inflation, that you would start to question the entire Quantity of Money Theory<\/strong>.<\/span><\/p>\n

\"\"<\/a>Draghi said Monday that he will continue to<\/span>\u00a0include the billion-dollar bond purchase program and he will reinvest<\/strong> expiring bonds exactly OPPOSITE<\/strong> of the policy at the Federal Reserve. While the dollar-bears<\/strong> keep calling for the end of the Greenback, they are deaf, dumb and blind when it comes to international capital flows or monetary policy outside the USA.<\/span><\/p>\n

Draghi realizes that he is subsidizing the European governments. He is not<\/strong> stimulating the economy, he simply has them on life-support.\u00a0 Stopping the bond program will lead to a major crisis when there is NO BID<\/strong> for government bonds.<\/span><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Draghi Admits He Cannot Stop Buying Gov\u2019t Debt Draghi has realized that he has singlehandedly destroyed the European bond market. Besides the fact that it is illegal to short government bonds, he has come face to face with the stark reality that IF the ECB stops buying government bonds,\u00a0there will be NO BIDat these price […]<\/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":[5496,233,282,2491,380,431,10686,5479,534],"class_list":["post-31709","post","type-post","status-publish","format-standard","hentry","category-economics","tag-armstrong-economics","tag-ecb","tag-european-central-bank","tag-government-bonds","tag-government-debt","tag-interest-rates","tag-mario-drag","tag-martin-armstrong","tag-monetary-policy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31709","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=31709"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31709\/revisions"}],"predecessor-version":[{"id":31710,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31709\/revisions\/31710"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}