Telegraph: Flat-Earth ECB kicks Spain in teeth

From Ambrose Evans-PritchardFlat-Earth European Central Bank misreads oil spike again, and kicks Spain in the teeth:

The reason why such shocks often lead to slumps is because policymakers make a hash of it. “The majority of the impact of an oil price shock on the real economy is attributable to the central bank’s response, not the inflationary pressures engendered by the shock,” wrote Bernanke…

The euro lives or dies on German sufferance. The unwritten contract of Maastricht is that EMU must be run on German terms, with a German veto over monetary policy. This contract is being tested…

… to raise rates into an oil shock – as it did July 2008 when the global system was already buckling – is the central banking cousin of Flat Earth belief…

Germany needed rates below the Euroland equilibrium at that moment [2005]. This is dirty secret that almost everybody in the German policy debate now chooses to forget, or never acknowledged. The ECB discriminated against Club Med. I should have thought Spain could sue the bank for misconduct at the European Court over that breach of its mandate.

Spain is now being whacked again.

Read more.

This entry was posted in Accountability, Debt Default/Restructuring, ECB/IMF, Economy, Energy / Natural Resources, EU, Euro / Sovereign Money, Geopolitics and tagged , , , , . Bookmark the permalink.

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