In a truly remarkable piece for the Financial Times yesterday, Wolfgang Münchau took another swipe at the Euro-sceptic and ECB-critical community in Germany, which he accuses of inflation-paranoia and of simply not getting ‘modern central banking’. Well, I know of many qualified commentators – many non-German – who swallow a tad harder when reflecting on [...]
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On Tuesday, July 3, London business paper City A.M. ran an editorial I wrote on Germany. The text is below. In the present debate on the Euro crisis, Germany is frequently portrayed as a model of economic strength, a beacon of fiscal prudence and a proponent of structural reform. Her resources seem endless and her [...]
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“The government can always pay.” This is a statement that has no basis in fact. Any rational analysis will quickly expose it to be a fallacy. Economic theory, economic history, and plain good old horse sense can demonstrate effortlessly that this statement is an illusion. Yet, it is today a widely held and deeply cherished [...]
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“The unlimited resources” of the European Central Bank (ECB) is quickly becoming the new magic mantra in political commentary and financial market analysis, now that the bigger euro-dominos are beginning to wobble and everybody realizes that nobody has the firepower to bailout Italy, or to ‘recapitalize’ (i.e. bailout again) all the banks that lent to [...]
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As you know, my expectations were low to begin with. I did not expect the EU summit on the debt crisis to provide a solution. There is no solution. The situation is beyond repair and the crisis will continue to unravel. What struck me most when reading the first responses to the EU summit was [...]
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What disturbing and nauseating image greeted us this morning from the covers of the morning papers: a smiling and moved Angela Merkel surrounded by a bunch of suited, self-satisfied, sycophantically grinning parliamentarians happily signing their country’s economic future away, burdening their fellow countrymen and women with financial obligations the grotesque size of which have long [...]
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This was another hectic week for financial markets, and nerves were calmed somewhat over the past 24 hours with another liquidity injection from the central banks – this time the provision of dollars from the U.S. Fed channelled through a few other central banks, most importantly the ECB. This is certainly not a solution but [...]
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“Italy, long a bystander to the euro-zone’s debt woes, was thrust into the eye of the storm on Monday, as investors fled the country’s bonds and Europe’s leaders struggled to keep the crisis from infecting the Continent’s third-largest economy.” Thus reports the Wall Street Journal Europe this morning. What?, I was thinking. Bystander? Investors fleeing [...]
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{ Feeding a little conspiracy theory ... considering a four-year schedule, put aside the gold standard... } – Sep 27, 3:20 PM
{ Federico, apologies for the slow response. You make a very good point. Banking systems in... } – Sep 27, 3:15 PM
{ Mr Schlichter, excellent article. I agree with previous comments to a great degree as well.... } – Sep 27, 9:16 AM
{ Richard Fisher, President of the Dallas Fed, and a member of the FOMC of the... } – Sep 27, 3:50 AM
