{"id":42713,"date":"2019-01-14T06:10:25","date_gmt":"2019-01-14T11:10:25","guid":{"rendered":"https:\/\/olduvai.ca\/?p=42713"},"modified":"2019-01-14T06:10:25","modified_gmt":"2019-01-14T11:10:25","slug":"the-ecbs-quantitative-easing-was-a-failure-here-is-what-it-actually-did","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=42713","title":{"rendered":"The ECB’s Quantitative Easing was a Failure–Here is What it Actually Did"},"content":{"rendered":"
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THE ECB\u2019S QUANTITATIVE EASING WAS A FAILURE \u2014 HERE IS WHAT IT ACTUALLY DID<\/a><\/h3>\n<\/div>\n<\/header>\n
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The main reason why the ECB quantitative easing program has failed is that it started from a wrong diagnosis of the eurozone\u2019s problem. That the European problem was a demand and liquidity issue, not due to years of excess.<\/p>\n

The ECB had been receiving tremendous pressure from banks and governments to implement a similar program to the US\u2019 quantitative easing, forgetting that the eurozone had been under a chain of government stimuli since 2009 and that\u00a0the problem of the euro-zone was not liquidity, but an interventionist model.<\/p>\n

The day that the ECB launched its quantitative easing program, excess liquidity stood at 125 billion euro. Since then it has ballooned to 1.8 trillion euro.<\/p>\n

\u201cOnly\u201d\u00a0after 2.6 trillion euro\u00a0purchase program and ultra-low rates.<\/p>\n

Eurozone\u00a0PMIs\u00a0are atrocious.\u00a0The euro-zone index falls from 52.7 in November to 51.3 in December, well below the consensus forecast of 52.8. More importantly, France\u2019s PMI plummeted from 54.2 in November to a 34-month low of 49.3.<\/p>\n

Unemployment in the euro-zone, at 8%, is double that of the US\u00a0and comparable economies. Youth unemployment rate remains at\u00a015%<\/a>.<\/p>\n

Economic surprise has plummeted as the ECB balance sheet reached 41% of GDP\u00a0(vs 21% of the Fed).<\/p>\n

More than\u00a0900 billion euro of non-performing loans\u00a0remain in the banking system, which keeps a trillion euro timebomb in its balance sheets (read<\/a>). A figure that represents 5.1% of total loans compared to 1.5% in the US or Japan.<\/p>\n

Deficit spending is rising.\u00a0Government debt to GDP has risen to\u00a086.8%<\/a>.<\/p>\n

The number of\u00a0zombie companies\u00a0-those that cannot pay interest expenses with operating profits-\u00a0has soared\u00a0to more than 9% of all large quoted firms, according to the\u00a0BIS<\/a>.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

THE ECB\u2019S QUANTITATIVE EASING WAS A FAILURE \u2014 HERE IS WHAT IT ACTUALLY DID The main reason why the ECB quantitative easing program has failed is that it started from a wrong diagnosis of the eurozone\u2019s problem. That the European problem was a demand and liquidity issue, not due to years of excess. The ECB […]<\/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":[7380,16957,233,282,285,487,661,662],"class_list":["post-42713","post","type-post","status-publish","format-standard","hentry","category-economics","tag-cobden-centre","tag-daniel-lacalle","tag-ecb","tag-european-central-bank","tag-eurozone","tag-liquidity","tag-qe","tag-quantitative-easing"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42713","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=42713"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42713\/revisions"}],"predecessor-version":[{"id":42714,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42713\/revisions\/42714"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}