“ECB Bond Buying Likened to Work of the Devil”

“The devil may have much more than the best tunes. To listen to the president of Germany’s Bundesbank, he also offers the best cautionary tale about the perils of state financing by a central bank.

Hannelore Foerster | Bloomberg | Getty Images Mario Draghi, president of the European Central Bank (ECB), signaled the bank will join forces with governments to buy sovereign bonds in sufficient quantities to remove all doubts about the future of the euro on Aug. 2, 2012.

After weeks of macro-economic sniping following his isolation at the European Central Bank over its new bond-buying policy, Jens Weidmann, on Tuesday resorted to Goethe’s Faust to make his point. The classic play highlighted, he argued, “the core problem of today’s paper money-based monetary policy” and the “potentially dangerous correlation of paper money creation, state financing and inflation”.”