Thursday, September 19, 2013

Once again, I'm Shocked! Shocked! (Not really)

From today's Open Europe news summary:
The ECB's Money Market Contact Group, a panel of industry members who advise the ECB, have called for the central bank to renew its three year long term refinancing operation (LTRO) next year due to fears over funding pressures as the current loans expire.
Once again, I'm (not really) Shocked!  Shocked! that politicians are prevailing upon a central bank to keep printing money.

Here is a short explanation of the LTRO.  It means that the European Central Bank can print money and funnel it to European banks so that THEY, and not the ECB itself, can monetize their own governments' debt.  This is just one of the many backdoor methods by which the ECB violates the Maastricht treaty, which specifically precludes it from buying sovereign debt.

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