Thursday, September 9, 2010

ECB's Ordonez: ECB funding shouldn't become 'permanent channel'

Is it time to start shorting the euro again?

Bank of Spain Governor and European Central Bank Governing Council member Miguel Angel Fernandez Ordonez said that ECB funding shouldn't become a "permanent channel."

I've been of the opinion that it's contrary to everything the ECB believes in, ideologically speaking, to be an open-ended funding mechanism for national governments. Ordonez seems to be echoing these sentiments.

If things start falling apart again I wonder how willing the ECB will be to continue funding without limit? There may be a point where they pull the plug and force national governments to submit to some very nasty medicine.

If that were to happen, the euro would be toast.

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