In terms of assets, the ECB is now bigger than the Fed.
We often hear people attack the Fed for "printing money." They're saying the Fed is "debasing" the currency. (Whatever that means because the currency has no "base.") Yet when it comes to the ECB these comments are nowhwere to be found.
That's odd, because these days the ECB takes the prize when it comes to "money printing." (Real term is accumulating assets and/or "total factors affecting reserve balances.")
The chart belows shows the balance sheet (total assets) of the Fed and the ECB in dollars. The ECB's balance sheet is now far above the Fed's, by about $400 bln and nearly $200 bln of that came in just the last six weeks. Where are the folks talking about the debasing of the euro?
There is clearly an anti-Fed, anti-dollar bias in the world.
That's odd, because these days the ECB takes the prize when it comes to "money printing." (Real term is accumulating assets and/or "total factors affecting reserve balances.")
ReplyDeleteCome on, lets call it what it is 'Weimar style debasement'. We don't need all of this technical jargon to cover the real truth. Its only a matter of time before Europe also experiences a 100 - 200 percent inflation.
I would have thought these central banks would have learnt from the mistakes of the Japanese lost decade. They did all this money printing and look where it got them, f'ing no where. They created so much 'extra' work that the maximum amount of people able to have a rest was 5.6%. All those Japanese working so hard, because the silly Government printed too much money. This is what debasement leads to, too many people working and not enough having a rest.
Lol!!!
ReplyDeleteMike,
ReplyDeletePerhaps send this to Schiff....
He might have to change the name of the firm from EuroPacific to AmeroPacific....
I think the ECB is supposed to maintain long term borrowing rates for each country at 2 pts above inflation or something, around there according to the Maastricht treaty. To carry out that requirement, they have to expand their balance sheet and buy these bonds to keep rates down. I don't know what inflation is in Italy, but It can't be above 5% with energy and commodities staying lower.
ReplyDeleteThe ECB is sterilizing most of its purchases, isn't it?
ReplyDeletehttp://www.youtube.com/watch?v=V32xVSOOl3E
ReplyDeletematt....but what happens when you tell peter schiff that contrary to his beliefs and statements, china has the biggest social security program in the world....
http://articles.businessinsider.com/2011-03-08/markets/29988183_1_money-supply-reserves-qe2
.....and is also the world's fastest money printer!
what does he change the name of his firm to then.....?!
....and not to mention that unlike the US, the chinese government ORDERS its banks to shovel every drop of this liquidity into the economy to prop it up.
ReplyDeletein fact after you reveal all these facts about the rest of the world to peter schiff, he will need to change his firm's name to kazakhstanpeterthiel'slibertarianisland because these will be the only two places in the world where there is no money printing because there is no money.
The Euroboyz are beating us to the punch to becoming Japanese.
ReplyDeleteI bet the Japanese knew what they were doing in the late 70's planning for today.
They live to 120 anyway, probably more.
It is actually a misleading graph. It should start in 2007 or something to really show what has happened. And then the picture will be different.
ReplyDeleteThanks for excellent post.
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