Comments on: LTRO was a necessary evil

By: agonzal0

agonzal0 — Fri, 09 Mar 2012 23:39:28 +0000

It’s good for intermediate inflation and making the inevitable more catastrophic.

At what point did the West do away with capitalism and decide that price discovery was a bad thing?

By: johnvos

johnvos — Tue, 06 Mar 2012 17:32:31 +0000

Every so often in history, those who think they’re in charge, this time the central bankers, discover they’re not. Bernanke, Draghi, et al have been neutered. We’ve now flown into a cloud with no instruments.

By: Hinch

Hinch — Tue, 06 Mar 2012 16:30:01 +0000

Kool Aid!

Hugo . . if you aren’t part of the solution, you’re part of the problem . . .

By: wirk

wirk — Tue, 06 Mar 2012 07:58:32 +0000

Long term the prospects of structural reforms in EUrope are better than ever. Fiscal pact will make impossible to avoid reforms by borrowing money. Thus, countries will face either accelerating decline or reforms. Reforms are always painful and public hates them. But with time, people get used to change and go with the flow. One can think the best model for this type of change is reform in Eastern Europe after the fall of communism. People there moved from no-unemployment jobs-guaranteed-for-life to the being leaders in temporary jobs. It was painful but in the end it became accepted.

By: Willvp

Willvp — Tue, 06 Mar 2012 07:36:04 +0000

Round Tripping, they call it.

expect banks to make huge profits coming 3 years, on the back of the European tax payers.

the ECB MUST be in the bank’s pockets, 4sure.

banks—>nice profits !
plebs—> austerity!

By: johnvos

johnvos — Mon, 05 Mar 2012 22:49:58 +0000

The banks now understand who’s in charge. Mr. Draghi will learn soon enough whose gonads are being squeezed.

By: PseudoTurtle

PseudoTurtle — Mon, 05 Mar 2012 17:39:38 +0000

Bailouts are NEVER a “necessary evil”, they are simply an “evil” that should never be tolerated in a free market economy, since it completely voids the risk/reward basis of free markets, and simply generates more unsound financial practices by a few at the expense of everyone else.

This is especially true, since it is being done as a QE program

In other words, “printing” electronic money without any value whatsoever that ends up as sovereign debt capitalized on the individual eurozone nations, especially that of Germany.

This will result in inflation, and destabilize the eurozone economy so that at some point soon it collapses.

If you want proof, look at how well the US economy is doing after being bailed out continuously since 2008. We are MASSIVELY in debt that we cannot ever hope to pay off and the economy is struggling to survive.

Bailouts are NEVER an acceptable solution. It is the investors who should take the haircut, since it is they who have profited.