Comments on: How Europe’s central banks are staving off catastrophe http://blogs.reuters.com/felix-salmon/2011/06/01/how-europes-central-banks-are-staving-off-catastrophe/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: OlafStorbeck http://blogs.reuters.com/felix-salmon/2011/06/01/how-europes-central-banks-are-staving-off-catastrophe/comment-page-1/#comment-27373 Mon, 06 Jun 2011 07:06:30 +0000 http://blogs.reuters.com/felix-salmon/?p=8488#comment-27373 Felix, I’m afraid you get it wrong this time. The question if Target2 balances are government debt and if they constitute a “stealth bailout” has been discussed in Germany since February.

The claim has been put forward by Hans-Werner Sinn (CESifo), but his way of reasoning is quite bizarr and he makes some statements about the way the ECB conducts monetary policy that are utterly wrong.

I’ve published a post on “Economics Intelligence” where I deal with the matter in a much more detailed way:
http://olafstorbeck.com/2011/06/06/the-s tealth-bailout-that-doesn%E2%80%99t-exis t-debunking-hans-werner-sinn/

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By: paulos http://blogs.reuters.com/felix-salmon/2011/06/01/how-europes-central-banks-are-staving-off-catastrophe/comment-page-1/#comment-27298 Fri, 03 Jun 2011 17:12:11 +0000 http://blogs.reuters.com/felix-salmon/?p=8488#comment-27298 Why doesn’t Germany leave the Euro along with Holland and one or two others? Their currencies will appreciate for a while whilst the Euro sinks. They will be owed money in devalued Euros but a haircut is coming either way. The PIIGS will get a currency that is devalued and an opportunity to grow.

I do wish something definite would be done rather than postponing the inevitable. The pressure is rising and the longer it goes on – the higher the pressure and the bigger bang at the end of it all. I cannot see Greece paying back the existing loans never mind borrowing more, even if we can accept the austerity ( and I doubt that).The Euro in it’s present form is not sustainable.

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By: DanHess http://blogs.reuters.com/felix-salmon/2011/06/01/how-europes-central-banks-are-staving-off-catastrophe/comment-page-1/#comment-27278 Thu, 02 Jun 2011 22:28:59 +0000 http://blogs.reuters.com/felix-salmon/?p=8488#comment-27278 The irony of it all is that Germany has an awful demographic (age) structure in its population and will need all its savings for the retirements of its own future elderly.

This is money that the German people have saved for a reason.

Of course its great sport to trick the old out of their money, wherever you are!

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By: Malwood http://blogs.reuters.com/felix-salmon/2011/06/01/how-europes-central-banks-are-staving-off-catastrophe/comment-page-1/#comment-27275 Thu, 02 Jun 2011 19:45:16 +0000 http://blogs.reuters.com/felix-salmon/?p=8488#comment-27275 I wonder if that 146 bio against Ireland in the chart above is just the cash that Irelands banks are borrowing from the ECB in the regular money market operations. That cash would be channelled through the Irish central bank, I believe?

I’m slowly coming round to the view that actually Greece and Ireland are very different, and this chart sort of illustrates this. With Greece there’s a lot of debate about where the extra chunk of cash is going to come from in order for Greece to meet the March 2012 bond redemption. But there’s no possibility of a debate like that for Ireland, because there’s no-one except the ECB that is ever going to fund the 146bio mentioned above that the irish banks need to keep going. So either that loan will keep getting rolled over, or …. except that there is no or. SO the question about the debts of the Irish banks: the ECB owns those now. My view is that the real question si who owns the assets? Suppose Irish government comes to accept that the banks can never be returned to health. If the ECB has no option but to keep those bank loans rolling over, then perhaps the Irish government will slowly start to withdraw it’s promissory notes, and maybe try to find a way to move depositors cash out from those banks into new institutions. It’s possible that there’s a whole new scale of disaster and mass misery awaiting here that would make Greece look pleasant.

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By: kolea http://blogs.reuters.com/felix-salmon/2011/06/01/how-europes-central-banks-are-staving-off-catastrophe/comment-page-1/#comment-27274 Thu, 02 Jun 2011 18:53:23 +0000 http://blogs.reuters.com/felix-salmon/?p=8488#comment-27274 How ironic that a mere 65 years later, Germany is bailing out the PIGs and the EU. Good money chasing bad in an EU death spiral and time running out. It’s raining in Spain too. Is there any silver lining?

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By: TomLindmark http://blogs.reuters.com/felix-salmon/2011/06/01/how-europes-central-banks-are-staving-off-catastrophe/comment-page-1/#comment-27253 Thu, 02 Jun 2011 03:28:13 +0000 http://blogs.reuters.com/felix-salmon/?p=8488#comment-27253 Great post. It’s hard to see a good outcome, save for one eventuality. Does all of this lead to an ECB central bank in the Fed model? I guess the corrollary to that question might be would such a development be all that unwelcome, at least to the technocratic class?

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By: TomLindmark http://blogs.reuters.com/felix-salmon/2011/06/01/how-europes-central-banks-are-staving-off-catastrophe/comment-page-1/#comment-27252 Thu, 02 Jun 2011 03:28:11 +0000 http://blogs.reuters.com/felix-salmon/?p=8488#comment-27252 Great post. It’s hard to see a good outcome, save for one eventuality. Does all of this lead to an ECB central bank in the Fed model? I guess the corrollary to that question might be would such a development be all that unwelcome, at least to the technocratic class?

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By: TomLindmark http://blogs.reuters.com/felix-salmon/2011/06/01/how-europes-central-banks-are-staving-off-catastrophe/comment-page-1/#comment-27251 Thu, 02 Jun 2011 03:28:07 +0000 http://blogs.reuters.com/felix-salmon/?p=8488#comment-27251 Great post. It’s hard to see a good outcome, save for one eventuality. Does all of this lead to an ECB central bank in the Fed model? I guess the corrollary to that question might be would such a development be all that unwelcome, at least to the technocratic class?

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By: GRRR http://blogs.reuters.com/felix-salmon/2011/06/01/how-europes-central-banks-are-staving-off-catastrophe/comment-page-1/#comment-27248 Thu, 02 Jun 2011 00:35:35 +0000 http://blogs.reuters.com/felix-salmon/?p=8488#comment-27248 “Just how much risk are Europe’s central banks going to take on, before they draw the line and say no mas?”

Well, there’s the problem: in either direction they take huge risks…saying no mas is no less risky than saying, thank you sir, may I have another?

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