The US is printing $85B a month (QE+buying mortgage bonds) and Japan is printing $79B month (with 1/3 of the size of our economy). Mario Draghi, Head of the European Central Bank, was heard to state that South Europeans can not manage their economies with the Euro being at $1.30.
We see He US Stock Market galloping in response to the injection of paper money and same for the Japanese. If Draghi is serious, the ECB can goose its stock markets by starting to print more Euros. \
Is this a good thing? NO!. The markets are expecting inflation and a loss of value of the currencies. That is why stock prices are rising. Politically, the rich get richer and the poor get poorer. They do not have the money to protect against inflation. Furthermore, it will be very difficult to walk back all that money without crashing the economy.
Thursday, May 9, 2013
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