Does the average European peasant think QE of 60 billion Euros per month will help their lives or improve their financial situation? If they do, they are in for an unpleasant surprise. QE does not help Main Street. It helps Wall Street. Stock markets are set to soar this morning because a central banker is going to print another trillion or so pieces of paper. This will end badly when the next crash proves that central bankers have committed an evil crime against humanity.
What ECB QE Will Do For The World (In 1 Word & 1 Simple Chart)
Submitted by Tyler Durden on 01/22/2015 08:16 -0500
Nothing…
“Differenty this time?” or “Einsteinian Insanity’?
With The ECB set to announce a QE4EVA-esque bond-buying initiative within the next hour or two, we thought it worth looking at just what The Fed’s balance-sheet experiment did for inflation expectations (the key narrative that is driving Draghi’s decision) and economic growth (what every politician is demanding Draghi help with)…
The answer… Nothing!!
Spain’s 10 Year bonds yield a record low of 1.47% this morning.
Italy’s 10 Year bonds yield 1.61% this morning.
US 10 Year treasuries yield 1.88% this morning.
Interest rates are supposed to reflect risk. Does anyone in their right mind think Spain and Italy are less risky than the U.S.?
In a free market, US yields would be 5% and Spain and Italy’s rates would be north of 10%. Of course that scenario would lead to economic collapse of all three countries.
The manipulation by central bankers is going to blow up the world.
What’s the definition of insanity again?
I wish it would do nothing.
Instead, it will do exactly what ALL QE does, mis-allocate assets.
Which, as is proved time and time again but we refuse to acknowledge it.
Once again, somebody (us) will be screwed. That ain’t nothing.
It is business as usual. I await the day that ends.
On the up side, if anybody has any worthless financial instruments they want to sell at face value, the ECB might be interested in buying them.