What Makes Mario Draghi So Dangerous For Europe

 

Home Forums The Automatic Earth Forum What Makes Mario Draghi So Dangerous For Europe

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  • #8438

    Eagle with fasces used on the war flag of the Repubblica Sociale Italiana. Image by Flanker The plan to "save the euro through unlimited bond-buy
    [See the full post at: What Makes Mario Draghi So Dangerous For Europe]

    #5460

    peter
    Participant

    further to the building of a new empire of Europe have a look at

    https://hat4uk.wordpress.com/2012/09/09/the-esms-articles-todays-must-read/

    where you can see quotes of the newly drafted ESM Charter
    eg
    “The archives of the ESM and all documents belonging to the ESM or held by it, shall be inviolable. The premises of the ESM shall be inviolable.”

    Looks like we are making an untouchable and unaccountable overseer of Euroland. And I suspect they will take their orders from the powers that be

    #5461

    Golden Oxen
    Participant

    Any plan that purports to keep Greece, Portugal and Spain in the Euro is sheer lunacy. We are going from the idiotic idea of the Euro in the first place into the realm of stark raving madness.

    Yes, Europe sure could use a real statesman, in the absence of such a savior; someone arising that is at least sane would be most welcome.

    #5466

    jal
    Participant

    You can’t, and shouldn’t, let unelected bankers decide matters that influence every aspect of a society.

    A battle ground!!!

    Mario Draghi may represent one side of the forces that will engage in battle.

    It will not be a traditional war. It will be fought in the financial realm.

    There will be blood in the street but it will just be collateral damage to the combatants.

    The longer Mario Draghi remains where he is, the more dangerous it gets.

    Yes. There will be opponents to Mario Draghi.
    Its in the nature of sharks. They will want to battle Mario Draghi to be king of the mountain?

    Opponents will need the technical financial skills and the resources to wage the battle with him?

    It will not be a shinning knight in white armor coming to save the people.

    #5467

    Viscount St. Albans
    Participant

    In our western democratic societies, all decisions should in principle be taken along democratic, i.e. elected, lines

    I often think that way. And then I drive down the highway and soak-in the asphalt strip malls, the fast-food joints, the Wal-Mart Warehouse depots, the sports stadiums, and the ubiquitous highway signage.

    And I say to myself: Here lies the fruits of Democracy.

    And then I wonder……
    Most of the human landscape worth noticing and remembering (the City Beautiful Movement, for example) occurred during a period of far less Democracy.

    Indeed, the depravity of our current urban/suburban/ex-urban landscape makes an ironic mockery of the Democratic ideals espoused by the elite movers-and-shakers who underpinned that Progressive Architectural fury.

    #5470

    Formerly T-Bear
    Participant

    The ECB still got it wrong, bless their pea-pickin’ souls. The ECB should not be BUYING bonds, they and the national central banks should be the ones SELLING bonds to the markets, bonds contracted for specific periods and SPECIFIC rates. The buyers (the market) have the choice to buy or not, as befits a truly free market. Any change desired before the period or rate is completed, the bonds can be sold on some secondary markets at the buyers will at the buyer’s risk. This would put a good measure of sovereignty back into the control of the issuing state. There is nil chance this will happen as long as incredible debt can be mass produced to stuff the vaults of a handful of creditors as income producing assets.

    #5473

    Ken Barrows
    Participant

    If the TAE theory is correct, Draghi will fail to stop deflation. As long as he is successful, it’s a closed loop of buying bonds and asset “inflation” following. Higher food prices may be more due to weather than Draghi’s misinformed policy.

    So I am thinking for the average person like me, what he does isn’t that important. Deflation will take hold–including stocks–once he fails, and I am up s**t creek without a paddle if I am not in cash, near cash, or hard assets.

    #5475

    pipefit
    Participant

    Hi Ken, you said, “If the TAE theory is correct, Draghi will fail to stop deflation.”

    Hard to say which way the house of cards will collapse. However, let’s step back and look at the whole forest, not just the saplings that have sprung up in recent years.

    The problems of Europe precede the Euro. The idea that everyone gets 6 weeks of Summer vacation, cradle to grave health (and other) benefits, extra pay at Christmas, etc. are all an example borrowing from the future. They create a specific amount of wealth over there, but their lifestyle is not tied to that specific pile of wealth. It is much higher.

    So the question is, ‘how do we reduce peoples’ standard of living to match economic output’? Well, the first problem one faces in solving this question is that they aren’t even to the point of asking this question. They are still at the very beginning of the problem solving exercise, trying to figure out what is the right question to ask!!!

    So I think it is pretty obvious that a huge bout of money printing and can kicking will come first (aka hyper inflation). As it becomes obvious that they are living beyond their means, they will start to ask the right questions.

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