The ECB and the EU are gargantuan failures unraveling in real time. To think that the conservative Bundesbank gents are forced to cede power and control to some Italian lunatic, who thinks it’s ‘very interesting’ to send free money to people directly, as a method of enacting central bank policy, is fucking hilarious.
Germany is besides itself with rage, whilst eating oversized pretzels and swigging down excess quantities of swill, as Draghi makes a mockery of their Austrian school of economics.
A storm of protest erupted in thrifty Germany after Draghi last month described the idea of “helicopter money” – sending money directly to citizens – as a “very interesting” – if unexamined – concept.
Late last week, top ECB officials, including the ECB’s chief economist and its vice president, backpedalled, saying the idea was not on the table. But the damage had already been done.
“The ECB’s policy was already unpopular in Germany and the idea of helicopter money was the straw that broke the camel’s back,” said Joerg Kraemer, an economist with Commerzbank in Frankfurt. “People feel that ideas like this are dangerous.”German analysts see the idea as an excessive ramping up of a loose money policy that is already fuelling rising property prices in their country, and also because it would undermine the euro by printing money and giving it away for free.
It marked a new low in the often fraught relations between the euro zone’s biggest country and the central bank’s Italian chief, who has recently bemoaned what he described as the “nein zu allem” (“no to everything”) approach – a swipe at Germany.
The ECB is scheduled to meet later this month. I would pay to be a fly on the wall to see the expressions on the German faces when Draghi reveals his Italian ‘bad bank’ fund scheme.
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Isn’t QE and lowering interest essentially helicoptor money too? The main difference is the drop locations.
Yes, Btn is correct.
Most bankers– except for Draghi— and most government officials– want to give money to the banks, and then pretend that it trickles down to the citizens. The citizens do not buy legislatures, presidencies etc. Banks do. So banks get the return on that investment in political contributions, not the citizens. Citizens only vote, and voters do not have as much say in government as donors do.
Giving money to the citizens has the advantage that you don’t have to wait and find out that it did not trickle down much at all. So, as a way to actually improve the economy, Draghi’s method would be far superior.
Austrian economics— otherwise known as Austerian economics, deserves lots of mockery. Due to Austrian economics believers in the U.S. Congress, we are kept from repairing our crumbling infrastructure now, while interest rates are low and borrowing would be cheap. We will do that later, when increased crumbling and higher cost borrowing will have made it far far more expensive. In the mean time, we risk various disasters from the crumbling stuff breaking.
In spite of preventing infrastructure spending, Austrian economists seem to always feel free to go ahead and put one unnecessary war after another on the national credit card.
Austrian economists are blind, deaf and dumb– unable to see and understand that Keynesian economics ended the Great Depression, by means of government spending on World War II. They make up some lie or another about what brought us out of the Great Depression.
Austrian economics is for the insane.