Eurozone Collapse: Economist wants EU to Rescue European Banks

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Eurozone Collapse

Eurozone Collapse?

The following article could make for compelling read; I am providing you with an excerpt of the article. Should you wish to read the full article, please click the link and new window will open up.  and so I thought I would highlight an excerpt of this article before getting to the story at hand:  (Click the link at the end to access the full article.)

” We live in a world where the main driving force behind this illusory economic recovery is hot money and fraudulent data manipulation.  According to Government stats, inflation is nonexistent, but anyone with a grain fo grey matter understands that this is not the real case.  Rents, education and medical costs are soaring, and salaries are dropping when inflation is factored in.

In simple words, you are working more and more for less and less. This is not the American dream, but it is more in line with one of the worst scenes from a very scary movie.  The primary driver, however, is hot money; cut this supply and the economic recovery comes to an end.  Central bankers are aware of this, and that is why they are embracing negative rates as it’s the only way to maintain this illusion. But, the million-dollar question is for how long? ”  Why everyone should own some Gold & Silver Bullion

 

Eurozone Collapse: Maybe and then again maybe not

The game is to push the masses into believing any narrative that allows central bankers to pump more money into the economy. We are in the midst of a currency war; the race to the bottom where the strategy is to try to finish last.  Eurozone crisis is overhyped but then so is every crisis since the beginning of time

And now, at the end of his term of office, Draghi is seeking to bind his successor, Christine Lagarde, to a council decision that will force her to aim for 1.9% inflation with asymmetrical concern about potential deviations. In plain language, this means the ECB will try to achieve this figure on average over time, netting out future above-average inflation rates with below-average inflation in recent years.

In seeking to justify the ECB’s new phase of expansionary monetary policy, Draghi referred several times to the rapidly deteriorating situation in Europe’s manufacturing sector. He wants monetary policy to come to the aid of a more expansive fiscal policy needed to revitalise the European economy.

Nor is it clear where the ECB will find the ammunition for the new battle it wants to fight. In the past four years, the bank has increased its money stock from €1.2tn (£1.1tn) to €3.2tn. It has bought securities worth another €2.6tn, including €2.1tn of public sector bonds – a policy that is in conflict with article 123 of the treaty on the functioning of the European Union. And interest rates are currently zero and negative. Full Story

Eurozone Collapse: False Narrative To Push Negative Rate Agenda

For five years, European nations have been trying to jump-start their ailing economies with what was supposed to be a radical, short-term remedy—negative interest rates.

Instead, central banks haven’t been able to wean their economies off them. Increasingly, they appear to be a permanent feature of the landscape. No major bank that introduced negative rates during Europe’s debt crisis has turned main policy rates positive again.

“Overall, we are on a painkiller,” said Tamaz Georgadze, chief executive of Raisin GmbH in Berlin, which provides a platform for consumers and businesses to deposit through 77 banks in 25 countries, “and it’s very hard to get off it.”

“Banks and the economy are realizing that this is the new normal with negative interest rates,” said Alternative Bank CEO Martin Rohner, while bank clients “are increasingly becoming aware that this is a fact of life.”

The ECB estimates these policies will add about 2 percentage points to inflation-adjusted GDP in the eurozone from 2016 to 2020. ECB President Mario Draghi in March called negative rates “a powerful instrument in enhancing, fostering the recovery and converging to price stability and achieving our objective.” Full Story

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Negative Interest Rates Help Foster Economic Recovery Illusions (18 Jun)

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