ECB should limit amount of liquidity in the eurozone, says Wolfgang Schaeuble [Telegraph]

The European Central Bank should try to limit the amount of the liquidity in the eurozone, Germany’s finance minister has said, as he warned that pumping money into crisis hit economies would not create growth if they were not matched by reforms.

The European Central Bank should try to limit the amount of the liquidity in the eurozone, Germany's finance minister has said, as he warned that pumping money into crisis hit economies would not create growth if they were not matched by reforms.

 

 

“There is much money in the market, in my view too much money,” Schaeuble said in an interview for the German economic weekly Wirtschaftswoche on Friday.

“If the ECB tries to use what leeway it has to reduce this great liquidity a little I would welcome that,” he said, adding that the ECB had done well to bring inflation below 2pc.

“We in Germany should not forget that many European countries are still in a precarious situation with economic growth,” he added. But pumping liquidity into their economies without far-reaching structural reforms would not create the conditions for sustainable growth. Mr Schaeuble said.

Mr Schaeuble also said he supported a global minimum corporation tax rate and that he remained committed to tackle evasion and tax havens.

Last November, Mr Schaeuble joined UK Chancellor George Osborne in calling for the world’s leading economies to combat tax avoidance and to force corporations to pay their fair share of tax or face the consequences.

 

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Jean Claude Juncker: Europe’s demons are only sleeping [Telegraph]

Jean Claude Juncker, prime minister of Luxembourg, who chaired a group of Euro-zone finance ministers at the height of the financial crisis, claimed that elections in Italy and Greece brought “national resentments to the surface, which we’d believed had gone away”.

He said that he had been appalled by protesters’ banners in Greece which showed Angela Merkel, the German chancellor, in Nazi uniform.

Mr Juncker said in an interview with the magazine Der Spiegel: “Anyone who believes that the eternal question of war and peace in Europe is no longer there risks being deeply mistaken.

“The demons have not gone away – they’re only sleeping, as the wars in Bosnia and Kosovo showed. I am struck by how much conditions in Europe in 2013 are similar those of 100 years ago.”

The way in which some political figures in Germany had been criticised in Greece has left “deep wounds” Mr Juncker said. He said the Italian election was also “excessively hostile to Germany and therefore anti-European”.

Jean Claude Juncker warns resentment of Germany could lead to new European war

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How A Handful Of Unsupervised MIT Economists Run The World [Zerohedge]

Ever get the feeling that the entire global economy is one big experiment conducted by several former Keynesian economists from MIT with a bent for central planning, who sit down in conspiratorial dark rooms in tiny Swiss cities and bet it all on green until they double down so much nobody even pays attention to the game? No? You should. Jon Hilsenrath, of all people,explains why.

From the WSJ:

Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.

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ECB Head Forced To Defend His Goldman “Conflicts Of Interest” [Zerohedge]

As we have discussed a number of times (most recently here), the infiltration of Goldman Sachs alumni into the highest ranks of political and monetary policy ‘running the world’ ranks is becoming pandemic. What is perhaps even more surprising is the fact that during the ECB’s press conference this morning, the head of the world’s ‘almost’ most powerful entity had to defend himself from such crackpot, tin-foil-hat-wearing, digital-dickweed-esque conspiracy theories that Draghi’s affiliation to the Mother Squid is of greater importance than his current professional position. The sadly ironic aspect is that Draghi’s membership of the Goldman Sachs-sponsored G-30 warranted more discussion during the press conference than that of Italy’s Monti debacle (or Greece’s “killer medicine”).

 

From ECB Press Conference

QUESTION:

Mr. President, I have two questions about your membership in the Group of 30.

First, taking your closeness to the private banks and in face of pending conflicts of interest and ethical issues, how do you explain your ongoing G30 membership?

And my second, of the 30 members, five members are formal or present bankers of Goldman Sachs.

This group is co-founded by Goldman Sachs. You’re a former fellow of Goldman Sachs.How do you intend to avoid conflicts of interest?

 

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ECB Bond-Buying: The Rape of Europe Continues [bullionbullscanada]

In the summer of 2011, I wrote a four-part series entitled Economic Rape of Europe Nearly Complete”. In that extended piece; I detailed how the combination of three malevolent forces was decimating the economies of Europe one-by-one.

Through the relentless fraud/manipulation in Euro debt markets, sadistic “austerity”, and so-called “bail-outs” which just bury these insolvent economies even deeper in debt; the Western banking cabal is systematically looting these nations.

The manipulation of European debt markets was (is) accomplished through the fraudulent riggingof the credit default swap markets; combined with the complicity of the Big Three ratings agencies and the West’s media Oligarchs.

The bankers manipulate credit default swap prices higher, simply by piling-on massive bets that a particular Euro-zone nation will default. The propaganda machine immediately shrieks that “risk” has now increased for this debt market, and then the accomplices in the ratings agencies comply with a ratings downgrade – immediately driving interest rates higher.

With the massive debts being carried by these economies, any increase in interest rates automatically makes the economy significantly less solvent, turning this tag-team of fraud into a self-fulfilling prophesy. With the banksters literally capable of manipulating Euro zone interest rates to any number they desire, as a matter of simple arithmetic it is impossible to “bail out” any of these nations – by lending them more money.

The moment more bail-out dollars are released, the banksters immediately drive interest rates even higher. Thus all the bail-out dollars are siphoned-out of the economy in the form of higher interest payments to the Bond Parasites, meaning all that each “bail out” accomplishes is to pointlessly pile on more debt.

Meanwhile, as more and more of every revenue-dollar is sucked out of these economies by the debt-market fraud, Austerity is literally nothing less than economic suicide. In economies already starved for capital, Austerity is the precise equivalent of a doctor putting a severely anorexic patient on a diet.

The empirical evidence is overwhelming. In every European economy which has inflicted Austerity on its population, the rate of economic contraction has accelerated, and the size of the budget deficits has grown larger instead of smaller. Since the entire raison d’etre of Austerity is to (supposedly) shrink these deficits, it is nothing less than deliberate suicide to continue this policy, and serves no purpose except to free-up more dollars to be paid out as interest payments to the Bond Parasites.

With these European governments having no viable plans for excavating their economies from debt, and with the bankers capable of instantly sabotaging any plan with more debt-market fraud (even if there was a plan); lending these economies more money (and calling that a “bail out”) is still more suicidal insanity. All that is accomplished is to increase the size of these debts – and interest payments on those debts – still further.

This systematic looting can only possibly result in the complete bankruptcy and total destruction of each of these economies, as has almost been completed with Greece. Now these Financial Fascists want to both accelerate their economic rape, and to tighten the choke-chains of debt around the throats of these governments.

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Friday Humor: The ECB Explains What A Ponzi Scheme Is; Awkward Silence Follows [Zerohedge]

From the ECB’s Virtual Currency Schemes, aka the “Bash Bitcoin Boondoggle” (p. 27):

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity

Considering that this elucidation comes from the very same entity that launched the SMP, LTRO, OMT, EFSF, ESM, oh, and of course, TARGET2, and whose head said to not short the EUR as there is “no risk” whatsoever in holding said currency, one would expect that this definition is absolutely spot on…

* * *

And as an added bonus, here is the part in which the ECB appears to be so worried about BitCoin taking over as legitimate “legal tender” from the EUR (which the ECB’s Coeure said two days ago is as “solid and longlasting as a diamond”) it dedicated an entire report to bash the recently conceived electronic currency:

In an extreme case, virtual currencies could have a substitution effect on central bank money if they become widely accepted. The increase in the use of virtual money might lead to a decrease in the use of “real” money, thereby also reducing the cash needed to conduct the transactions generated by nominal income. In this regard, a widespread substitution of central bank money by privately issued virtual currency could significantly reduce the size of central banks’ balance sheets, and thus also their ability to influence the short-term interest rates. Central banks would need to look at their existing tools to deal with this risk (for instance, trying to impose minimum reserve requirements on virtual currency schemes).

The substitution effect would also make it more difficult to measure monetary aggregates and, as a consequence, would affect the relationship between the monetary aggregates as measured and inflation, which is used to gauge risks to price stability in the medium to longer term.

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Update on the banking union initiative in the Eurozone [SoberLook]

Here is the latest on the Eurozone-wide bank regulation initiatives. The area leadership seems to have agreed on some key principles of bank supervision:

  1. The ECB will be the ultimate supervisor for all 6,000+ Eurozone banks.
  2. National regulators will run day-to-day supervision for all banks, except…
  3. The ECB will directly oversee the 25 largest “systemic” banks.
  4. Bank bailouts via the ESM will not take place until the EMU-wide supervision is put in place (supposedly by 2014, though looks unlikely).
  5. The ECB will have the ability to intervene in any of the Eurozone banks.
  6. The ECB would not object if some EU banks outside of the Eurozone were supervised separately.

Reuters: – While he fully expects the ECB to have authority over all the euro zone’s 6,000 banks, the Frankurt-based institution would concentrate on the systemically important lenders and delegate routine supervision of the rest to local watchdogs.

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