The EU: a 46 Trillion Euro Lehman Brothers?

Sunday, May 1, 2016
By Paul Martin

by Phoenix Capital Research
ZeroHedge.com
05/01/2016

So much for QE as the answer to the EU’s problems.

In 2012, during the depth of the EU banking crisis which nearly took the entire EU financial system down, Mario Draghi stated that he would do “whatever it takes” to hold the EU together.

Anyone paying attention knew that this was a bluff. True, the ECB and EU leaders had already defied if not broken every condition of the Maastricht Treaty and the Schengen Treaty (the legislation that formed the EU proper). However, even to the most cynical analyst, Mario Draghi’s claim was pushing the envelope a little too hard.

Implementing capital controls and border controls limit freedom, but from the perspective of monetary policy, they’re secondary items. The REAL power is that of the printing press.

This is how Draghi’s promise to save the EU was different from every other action: it addressed the structure of the EU in its most critical component, namely the control of the currency.

It took the EU two years to cobble together its reasoning for how something that went completely against the Maastricht Treaty would be permitted. As usual it was the Germans (the ultimate holders of the purse strings) who gave the “OK.”

Since being given the green light on QE, Draghi has spent over €600 billion. The ECB’s balance sheet is now approaching its former record high from 2012 after the massive LTRO and LTRO 2 programs.

And Draghi has accomplished?

Not much of note. The EU’s inflation rate is clearly trending lower. This is AFTER the first ever QE program was both launched and increased in pace form €60 billion to €80 billion per month.

The Rest…HERE

Leave a Reply

Join the revolution in 2018. Revolution Radio is 100% volunteer ran. Any contributions are greatly appreciated. God bless!

Follow us on Twitter