Deflating Central Bankers

Super-Mario,” the President of the European Central Bank, didn’t look or act quite so super today, as he disappointed market participants’ big-time, or at least those participants daft enough to listen to him in the first place.

The “deal” was supposed to be, “ I’ll use all the instruments available” to help reach his 2 per cent inflation target, following his “Ill do what-ever it takes to stop deflation,” with the inferment of yet more stimulus by way of extra quantitative easing at today’s ECB policy meeting.

In the event the 25-member Governing Council reduced the deposit rate by 10 basis points to minus 0.3%, which along with three other euro-zone central banks with negative-deposit rates, is supposed to entice depositors’ to spend but is actually a tax on savings, near guaranteeing less consumption, not more.

There was no immediate extra QE, but there was an extension by six-months to March 2017 of the original period, thereby offering a delayed additional €360BN.

As pointed out in our February 2015 post, “Deflation Denial:”

The World’s central bank elite have done their best to “CON-vince” the herd that it will not happen on their watch and that they have the tools to stop the return of it, by way of chucking even more debt at a fundamental debt problem and by a delusional mantra that they actually control interest rates, at least the ones that matter to most living mortals outside of banking.

One glance at a CPI compilation of the 37 economies that the International Monetary Fund ranks as “advanced.” Paints another story:

 Global CPI at Oct 2015

Behind the curtain, Draghi and his colleagues must be feeling deflated.

 

 

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