The president of the ECB said the decision to unleash the new action, which will
be called Outright Monetary Transactions (OMT), had not been unanimous. He
refused to confirm that the “one dissenter” on the ECB’s Governing Council was
Jens Weidmann, head of the Bundesbank, but repeatedly told reporters that both
he and the bank were “independent”. “I am who I am,” he said. As I understand
it the ECB will only buy on the secondary market therefore it won't be taking
part in national bond auctions. It will also only buy the bonds of countries
which have been bailed out. So currently this only applies to Greece, it doesn't
solve the problem for Spain or Italy unless they ask for a bailout and get one.
It is of course unclear where the money would come from for a Spanish or Italian
bail out. So I really can't see how this would help Spain get away its bond
auctions, the ECB can't buy at the auction ( someone else would have to buy
first) and they can't buy unless a bailout is requested. Also Greece as far as
I know doesn't issue new debt, it relies on bailout funding and no newly bailed
out country would issue new debt either. So I can't quite see how getting
involved in the secondary market will help those countries. Finally of course
this doesn't do anything to either write off debts or deficits. Countries are
going to have to keep cutting , cutting , cutting, their economies will continue
to shrink and their debts ( via bailout funds) will continue to grow......
unless a solution is found to the deficit problem we won't find a solution to
the debt problem. I'm afraid I really can't see this helping much at all in a
practical sense although obviously the announcement has news value and therefore
excites the market. Putting something in place that allows debt ridden nations
in deficit to potentially get further into debt and further behind the funding
curve is hardly something to get excited about. 'Unleashed' was it? You can't
unleash something you leaked the day before. The EU propaganda machinery is in
overdrive at the moment - leaking one minute and then unleashing the next. I
can't wait to see Draghi doing a 'Putin' beating his beared chest to emphasise
the ferocity of the whimpering mouse he has set upon the financial markets.
Draghi is Merkel's puppy. He was her nominee and when she barks he whimpers. If
they ever have a real conflict he would not last a second. "I am who I am" "I
Am that I Am is a common English translation of the response God used in the
Hebrew Bible when Moses asked for his name." It's also a gay anthem. he's off
his trolley, probably because he must find a new anthem and something else to
unleash next week.,,,I wait in bemused anticipation.
Access Investments-Building Awareness - European Union-ROMANIA
Monday, September 10, 2012
...the decision to unleash the new action...
The president of the ECB said the decision to unleash the new action, which will
be called Outright Monetary Transactions (OMT), had not been unanimous. He
refused to confirm that the “one dissenter” on the ECB’s Governing Council was
Jens Weidmann, head of the Bundesbank, but repeatedly told reporters that both
he and the bank were “independent”. “I am who I am,” he said. As I understand
it the ECB will only buy on the secondary market therefore it won't be taking
part in national bond auctions. It will also only buy the bonds of countries
which have been bailed out. So currently this only applies to Greece, it doesn't
solve the problem for Spain or Italy unless they ask for a bailout and get one.
It is of course unclear where the money would come from for a Spanish or Italian
bail out. So I really can't see how this would help Spain get away its bond
auctions, the ECB can't buy at the auction ( someone else would have to buy
first) and they can't buy unless a bailout is requested. Also Greece as far as
I know doesn't issue new debt, it relies on bailout funding and no newly bailed
out country would issue new debt either. So I can't quite see how getting
involved in the secondary market will help those countries. Finally of course
this doesn't do anything to either write off debts or deficits. Countries are
going to have to keep cutting , cutting , cutting, their economies will continue
to shrink and their debts ( via bailout funds) will continue to grow......
unless a solution is found to the deficit problem we won't find a solution to
the debt problem. I'm afraid I really can't see this helping much at all in a
practical sense although obviously the announcement has news value and therefore
excites the market. Putting something in place that allows debt ridden nations
in deficit to potentially get further into debt and further behind the funding
curve is hardly something to get excited about. 'Unleashed' was it? You can't
unleash something you leaked the day before. The EU propaganda machinery is in
overdrive at the moment - leaking one minute and then unleashing the next. I
can't wait to see Draghi doing a 'Putin' beating his beared chest to emphasise
the ferocity of the whimpering mouse he has set upon the financial markets.
Draghi is Merkel's puppy. He was her nominee and when she barks he whimpers. If
they ever have a real conflict he would not last a second. "I am who I am" "I
Am that I Am is a common English translation of the response God used in the
Hebrew Bible when Moses asked for his name." It's also a gay anthem. he's off
his trolley, probably because he must find a new anthem and something else to
unleash next week.,,,I wait in bemused anticipation.
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Eurozone crisis
Anna Leach, head of economic analysis at the CBI business group, said: "We would need only a relatively small deterioration in economic conditions to prompt a further extension of the asset purchase programme later this year."
Nida Ali, economic advisor to the Ernst & Young ITEM Club, said: "With MPC members currently in wait-and-see mode, we weren't expecting any change in monetary policy this month."
She added: "The Bank has not indicated any intention to loosen policy further in the future, but may be forced to provide greater support if the eurozone crisis worsens."
In addition to cutting its UK growth figures, the OECD also cut those for the eurozone bloc, including the region's main economic driver, Germany
Analysts noted that the once mighty Bundesbank had been sidelined. "Germans feel utterly deserted and mocked by the fact that their Bundesbank has been so completely isolated, as has Germany," said Gunnar Beck, a specialist in EU law at London's School of Oriental and African Studies."While this looks like an attractive solution in the short term, in the long term it's disastrous, as it takes away any incentive for reform from the countries in crisis."
Beck said the Draghi ruling had set off alarm bells for many Germans. "Like many Germans over 40, I grew up being told of my grandparents' experience as very young people in the 1920s who experienced hyperinflation and were ruined by it," he said. "It's a collective phobia. Then, as now, it's the people who are least guilty, who invested conservatively, who are the ones who are asked to pay for the losses of the risk-takers."
Beck said it was likely Draghi had been informed of what the court's decision will be on Wednesday, ahead of making his announcement. "Draghi, or let's call him Draghiavelli, is a shrewd operator who waited for the moment when his solution would seem the most opportune," he said. "He must have been given the OK by Merkel and she wouldn't have done that if she hadn't known how the court would decide on Wednesday." He said the Draghi announcement would add pressure on the court, whose decision was vital to the future of the euro.
The case was brought by a group of more than 12,000 plaintiffs, including a growing band of eurosceptics from academia, Angela Merkel's coalition and the hardline Left party. Karlsruhe shocked the political establishment in July by saying it needed two months to examine complaints that the rescue fund violated the constitution. Political observers believe the anti-euro group has the makings of a new party, unprecedented for Germany, where there are no anti-European parties.
"There's a certain angst now among politicians that people are distancing themselves from Europe for the first time, as the Germans wake up to the fact that Europe can no longer be united by Germany's war guilt, but needs to be united by the idea of a common, successful currency and by making it work," said Wolfgang Nowak, a former adviser to chancellor Gerhard Schröder. "Germans would probably do themselves a service by leaving the euro, but this is something that is unsayable in German politics."
Germany is standing in the way and have become the problem to over come and not the solution.
Further delays and uncertainty in the Euro zone is not acceptable and is putting all investment and job creation in limbo
Of course it is better to have Germany in the Euro but not at the cost of the uncertainties of not having a proper central bank.
Germany in and with non central bank, is not better than Greece in with a Central bank .
The other 16 countries including France have a enough fire power and assets to underpin the Euro with a proper central bank .
This would not be ideal but the big loser would be Germany , if reverted to the DM, the DM would soar temporally in value and suck in imports from surrounding countries . Germany exports would be hit and unemployment would rise .
Meanwhile the Euro would devalue and boost its exports , Germany leaving the Euro does have certain pluses for the Euro zone . Germany is in no position to bargain over the central bank !
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