Tuesday, December 20, 2011

ECB: Leaving the way clear for the bond speculators

Tobias Kaiser in Die Welt, a conservative German newspaper, gives a good statement of how the European Central Bank's (ECB) refusal to act as de facto buyer of last resort for eurozone sovereign debt works to the advantage of bond speculators in EZB gegen Fed.Zwischen Notenbanken tobt der Kampf der Kulturen 18.12.2011:

Befürworter der Anleihenkäufe hoffen auf eine Signalwirkung der Ankündigung. Die Erklärung, unbegrenzt Anleihen aufzukaufen, gliche einer Kriegserklärung an Spekulanten. Die Zentralbanker würden damit ihre Bereitschaft signalisieren, mit allen Mitteln dafür zu kämpfen, dass die Zinsen für hochverschuldete Euro-Länder niedrig bleiben. Die EZB wäre ein mächtiger Gegner für die Märkte, denn sie verfügt über praktisch unbegrenzte Ressourcen, um ihre Ziele durchzusetzen.

[Supporters of the bond purchases hope for a significant effect of the announcement. The declaration to buy up bonds without limit would amount to a declaration of war on speculators. The central bankers would thereby signal their wilingness to fight with all means to keep the interest rates for highly-indebted euro countries low. The ECB would be a powerful opponent for the markets, because it has access to virtually unlimited resources to achieve its goals.] [my emphasis]
ECB chief Mario Draghi and Angela Merkel's currently-dominant government in Germany have no intention, it seems, in acting as opponents to the bond speculation market. They are willing to see the democratic and peace-promotion goals of the European Union are currently taking a back seat to the subservience of the EU institutions to Big Capital. Don't expect any "declaration of war on speculators" from this bumbling gang currently running the EU.

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1 comment:

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