Friday, May 16, 2014

Gary Shilling praises Draghi

Draghi gets a lot of credit for his July 2012 “whatever it takes” statement, but it was foreshadowed by the earlier lending program. 

In the last year-and-a-half, most of those ECB loans have been repaid. The ECB could probably reactivate this form of QE by “encouraging” its member banks to renew their borrowing. In any event, it will take much more than words to reduce the euro’s value significantly and head off deflation.