Central Banking 101: LTRO killed the EONIA heartbeat | 20 comments (20 topical, editorial, 0 hidden)

Re: LTRO killed the EONIA heartbeat (none / 0)

He's using the tired metaphor "printing money" for crediting bank reserve account balances.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sun Jul 8th, 2012 at 05:20:30 PM EST
[ Parent ]

Re: LTRO killed the EONIA heartbeat (none / 0)

Never heard it. I stil don't understand, how does that lower interest types? (which seems to bother that Sinn guy)

res humà m'és aliè

by Antoni Jaume on Sun Jul 8th, 2012 at 05:30:46 PM EST
[ Parent ]

Re: LTRO killed the EONIA heartbeat (none / 1)

By expanding the money supply (that's what "printing money" is supposed to mean). This would presumably cause inflation (horrors!) and lower interest rates (because of the increased supply of money), both of which are presumably bad for savers.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Sun Jul 8th, 2012 at 05:51:00 PM EST
[ Parent ]

Re: LTRO killed the EONIA heartbeat (none / 1)

Quantity of Money Theory wiki

It was Fisher who (following the pioneering work of Simon Newcomb) formulated the quantity theory of money in terms of the "equation of exchange:" Let M be the total stock of money, P the price level, T the amount of transactions carried out using money, and V the velocity of circulation of money, so that
M V = P T

It was an advance for its time, which was one of the Gold Standard.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jul 8th, 2012 at 06:25:35 PM EST
[ Parent ]

Central Banking 101: LTRO killed the EONIA heartbeat | 20 comments (20 topical, 0 editorial, 0 hidden)

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