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ECB To Start Massive QE Program

Arkless Repairs said:
If they must do this then give the money directly to the people... except the rich ones of course!
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One way to do that is to directly employ people, or subsidize their education. Building infrastructure, teaching: anything that might improve the standard of living for all. I suppose supporters of QE might say this should happen indirectly since it lowers government borrowing costs.
 
What if Oprah were parachuted into the EU and gave everyone a new car or a Statement amplifier?

Cars need insurance, fuel, maintenance, roads, etc., and a Statement amp would necessitate a major source upgrade, either of which would yield untold dividends for the European economy.

Joe
 
Jonathan Ribee said:
I think it's a choice between being seen to be doing something that will have little impact and doing nothing - which may have the same magnitude of impact by being seen as a message in itself.

Aren't the other possible choices politically untenable?
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QE actually works, in as much as it does work, by sending a message which is hopefully strong enough to change people future expectations of inflation and so change their spending. But in an environment where you only do it reluctantly when everyone has no choice in the face of a deflationary trap, then that half-assed approach is just not going to work.
 
russel said:
Could someone please explain why the electronically created money is not spent on infrastructure, say putting fibre to every home in Europe, building new homes, not Spain natch, they have enough, insulation for homes etc, stuff that would generate a return on investment and employ people other than bankers?
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Because it is politically unacceptable to use Fiscal policy to fix the economy so we are stuck with largely ineffective unconventional monetary tools.

But yes in a sensible world we would probably print money and spend it on useful things and give everyone a cheque for €1500 (aka "helicopter money"). I am more likely to give birth to triplets that for that to happen.
 
What little I understood is that the EU will "print" more Euros, and use them to buy bonds supporting the various national debts. By increasing the amount of Euros in existence, this should (indeed has) de-value it with regard to other currencies. All this together will make Euro-zone people poorer, but also more competitive globally. So more exports and less unemployment.
But I may be wrong....
 
Is there any evidence, of any kind, anywhere, to suggest that interest rates of <very very low> do anybody any good??
 
clifftaylor said:
Is there any evidence, of any kind, anywhere, to suggest that interest rates of <very very low> do anybody any good??
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Reducing rates when the economy is flagging definitely helps boost the economy. The difficult bit though is what do you do when the rates cannot be reduced any lower and the economy is still stuck.
 
Matthew,

The difficult bit though is what do you do when the rates cannot be reduced any lower and the economy is still stuck.
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Apart from the obvious -- increase public spending on infrastructure, education, training, etc.

Joe
 
Advocating the use of Fiscal policy will see your Davos and Bilderberg invites withdrawn Joe so I suggest you edit that post quickly.
 
matthewr said:
QE actually works, in as much as it does work, by sending a message which is hopefully strong enough to change people future expectations of inflation and so change their spending. But in an environment where you only do it reluctantly when everyone has no choice in the face of a deflationary trap, then that half-assed approach is just not going to work.
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I think the big problem is peoples' future expectations of earnings. The middle class can see which way things are headed: more unemployment, lower earnings, cuts to pensions and bigger out of pocket costs for life's essentials (health, education).

I think we could easily break the deflationary spiral with a good dose of wealth redistribution but neoliberal economics doesn't like that. Perhaps this is a the capitalist end-game that Marx predicted ?
 
Meanwhile in Davos:

This Bloomberg report from Davos is making the rounds:

Billionaire Jeff Greene, who amassed a multibillion dollar fortune betting against subprime mortgage securities, says the U.S. faces a jobs crisis that will cause social unrest and radical politics.

“America’s lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence,” Greene said in an interview today at the World Economic Forum in Davos, Switzerland. “We need to reinvent our whole system of life.”

Later in the article:

Greene, who flew his wife, children and two nannies on a private jet plane to Davos for the week …
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Is he advocating some kind of Stalinist imposition of a single nanny per family? Communism! Like Obamacare. And French Fries.
 
Meanwhile on pfm...

Bite me, billionaire Jeff Greene!

Later in the article :

No, really. Bite me, billionaire Jeff Greene!
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Joe
 
Another EU treaty violated; but then the laws are only for the little people who manifestly don't matter.
 
sudo money

US-dollars-in-packs-011.jpg
 
Still said:
The Euro will certainly continue to weaken in exchange for Sterling.
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That's a shame. I've got €200 I've not changed back to Sterling yet. Might as well hang to them until this QE eventually recovers the euro value. Or is this class as money laundering?
 
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