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I think the main benefit of Mario's policies is that the ultra low interest rates help net debtor countries, firms and individuals and annoy the creditors who want an easy way to make money. Everything else is a bit like pushing on a rope: the rope may coil up in bank vaults, but it isn't doing much of anything in the real world. Even asset price inflation is caused more by "investors" buying in desperate search of a return because their money in the bank isn't doing much of anything for them.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Mar 15th, 2016 at 05:02:40 PM EST
[ Parent ]
May it also not be due to bank secrecy as to their obligations when their bad bets come due?

That confidence fairy has to keep spinning to stay vertical.

The real numbers would scare the people into mass panic, the Charybdis to the CD swaps' Scylla.  So Draghi's can kicking gives time for Godot to show up (and his buddies to get their cash out of Dodge).

OT, but is Trump against TTIP?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Tue Mar 15th, 2016 at 11:29:17 PM EST
[ Parent ]
 OT, but is Trump against TTIP?

AFAIK Trump has made anti-free trade noises - "exporting our jobs" - because its a populist thing to say.  Not sure that is any guide to what he would do.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Mar 16th, 2016 at 07:45:53 AM EST
[ Parent ]
It is highly risky to go into debt even with negative interest rates in this economy. Singing how the low rates benefit debtors and discourage creditors is a fallacy. Under deflation, the creditors have the power to squeeze debtors badly while living comfortably. The game now is not financial returns but materializing your financial positions. Asset grab, baby!
by das monde on Wed Mar 16th, 2016 at 12:40:45 AM EST
[ Parent ]
Which is why countries, companies and individuals are all doing everything they can to reduce their net debt positions even though interests are so low and why the ultra low interest rates and QE are having so little stimulative effect on real economies or on inflation. With everyone repaying their debts, banks and vulture funds have to find somewher else to put their money.

The main reason Ireland's budgetary position has improved so much is that its interest costs are way below budgetary expectations which has in turn helped Ireland to reduce its debt/GDP  ratio from 121% to 95% in just 3 years.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Mar 16th, 2016 at 07:55:26 AM EST
[ Parent ]
Elite Bankers LOVE deflation. After the US Civil War Morgan was allied with the Rothschilds of London and had access to vast reserves of gold. They contributed, bribed and agitated to retire the Greenback Dollars, which produced deflation, and then their agents proceeded to foreclose on most of the loans they had made, thereby pocketing the profits already made plus the assets against which the loans had been made. It was the financial basis for the creation of the Southern term "Carpetbagger", and Carpetbaggers were protected by the Union Army and Reconstruction state governments. That is part of the dark side of Reconstruction.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Mar 20th, 2016 at 11:49:13 AM EST
[ Parent ]
Whatever "Gone with the Wind" might preach, the aristocracy was in serious financial difficulty before the war, but after the war it managed to regain economic control, thanks to large injections of Northern and British capital.  With renewed economic power came a return of political power, even before the end of Reconstruction, which simply finished the job.  I highly recommend a book titled "Ballots and Fencerails", which focuses on Reconstruction in the Lower Cape Fear in North Carolina.
by rifek on Mon Mar 21st, 2016 at 10:41:58 PM EST
[ Parent ]

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