Friday, November 6, 2020

The usual hallucination

In the race to pretend to debase, Europe’s central bank has pulled ahead of America’s. The ECB’s balance of digitally-printed bank reserves is rising fast while the Federal Reserve’s reserves plateaued months ago. For the first time in its history, the Europeans claim “excess liquidity” (their term) in excess of €3.3 trillion and steadily rising.

In years long past, this “flood” would’ve unleashed howls of protest spoken primarily in the German language, the damning label “Weimar” thrown loosely around in even mainstream channels. Nowadays, barely a peep.


One big reason why is the constant and real flood of instead deflationary signals proliferating and rising. Where inflation - or at the very least early signs of inflation - are supposed to be, there remain only the opposite despite the ECB on the winning side of QE pacing.

ECB is really a Geman centralized bank as Germany collects most of the ECB taxes, and yes, those reserves are there for tax avoidance. And no, this is not pretending to debase, this is collecting taxes from the periphery and sending them to Germany.  Their nightmare is actually much worse than ours. If the Euro is to be devalued then it is Germany who decides, and they will collect ECB income as long as possible.

No comments: