Thursday, May 2, 2013

Recession in Europe.

The European Central Bank is  hopelessly confused and not doing its job.  Germany lost WW II, but is now wreaking havoc  on the rest of Europe worse than a Panzer division.  Here is their lame excuse as reported by the New York Times.
     "But despite his pledge at that time to do ‘'whatever it takes'’ to save the euro, Mr. Draghi does not appear willing to risk an outcry in Germany by throwing out the rule book altogether. And he must contend with the European Central Bank’s 23-member Governing Council, which includes the heads of all 17 national central banks in the euro zone.
“There are 17 governors of 17 member states with completely opposing views,” said Zsolt Darvas, a research fellow at Bruegel, a research organization in Brussels. “There are major disagreements. Probably they try to err less by being more cautious rather than being more aggressive.”
In addition, Mr. Darvas said, the European Union lacks a central treasury that would stand ready to provide financial backup if central bank investments went wrong, as the United States Treasury implicitly backs the Fed."
    This is myth and superstition at its worst.  A central bank can't go broke as it can always create more money if the previous creations don't work.. Try, try again until you get it right. If these bankers had a family out of work and unable to buy the necessities of life, it would not cling to this outmoded policy.

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