Dam breaks in Europe as deflation fears wash over ECB rhetoric – Ambrose Evans-Pritchard – Telegraph

This is an excellent article from Ambrose Evans-Pritchard, published in the Telegraph. Check it out!

via Dam breaks in Europe as deflation fears wash over ECB rhetoric – Telegraph.

The article, once again, highlights that austerity will not be enough to reverse the Eurozone’s debt crisis. Now the focus is on big players, like France and Italy, where the outlook is increasingly bleak. Because of Germany, the ECB is unable to act like a proper central bank (like the Fed, BoE, BoJ, or even the BoI).

Personally, I would expect to see speculators returning in a big way, probably leading to another Euro crisis. The leaves two residual scenarios:

  1. German reflates; Germany agrees to fiscal flexibility for the likes of France, in exchange for hard reforms; and the ECB introduces full scale QE (quantitative easing); or
  2. Break-up of the Euro, with risk of deep economic depression in many European countries, before recovery after several years of enormous pain.

Either way, politically, the EU must change.

Thoughts?

ECB’s Mario Draghi and his misguided malcontents – FT.com

This is an excellent editorial article from the FT. It’s a strongly recommended read. Check it out!

via ECB’s Mario Draghi and his misguided malcontents – FT.com.

The Eurozone is in an increasingly desperate mess, despite strong growth in both the US & the UK. Strong fiscal measures for the Eurozone have been vetoed by Germany and her flunkies in the ECB and the European Commission.

Mario Draghi, head of the ECB, is operating with his hands tied behind his back; he’s not allowed to be a real central banker.

According to the FT, the ECB’s latest ABS purchase scheme has aroused suspicion from Wolfgang Schäuble, German finance minister, and outright opposition from Jens Weidmann, Bundesbank president, and the wider Bundesbank establishment.

Not only has conservative German economic policy from Wolfgang Schäuble and Jens Weidmann been responsible for destroying Southern Europe, it is now damaging Germany as well.

This blog respects the idea that Germany will conditionally agree to monetary and fiscal latitude in return for real economic reform in Southern Europe.

Let me ask two open question:

  1. Surely, it is time for the people in Germany to push back against the the conservative politicians who are destroying Europe, including Germany?
  2. Otherwise, surely it’s time to dismantle the Euro?
Thoughts?
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