The Bernanke school of money printing has spread its wings in a big way as the Europeans have followed in the foot steps of choosing to inflate away its debt problems and bide time rather than deal with the issue of solvency and too much debt. Banks and bondholders have now been bailed out while Greece will go thru a depression and others will see painful economic contraction. The 750b euro EURP plan (their version of TARP) will consist of 440b of loan guarantees rather than any release of cash right now, the EU will add 60b of euros to its piggy bank for emergencies and the IMF will contribute 250b euros. The ECB and individual central banks will also buy sovereign debt outright in the secondary market BUT the ECB says they will sterilize their purchases as not to increase the money supply to appease the inflation hawks and the Germans. The ECB’s purview is no longer monetary policy unfortunately and gold should be bought on all pullbacks.

Category: MacroNotes

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

One Response to “When in debt, inflate and bide time”

  1. franklin411 says:

    Inflation is good for just about everyone, except for a tiny, infinitesimally small number of fat cats who deserve what they get.