Zero Hedge: As BofA’s European credit strategist, Barnaby Martin, puts it in one of the final issues of his European Credit Strategist report for the year, “2020 is ending with one of the most predictable and potent themes of the last decade: central bank activism.”
Lagarde gave bond markets another dose of PEPP: a €500bn increase in the envelope and an extension of buying until March 2022. Thus, big QE will still be with markets for some time.
But as this week’s PEPP disclosure shows, the programme is now almost exclusively about buying government debt (Chart 13). Instead, weekly APP has become more relevant for gauging the pulse of ECB corporate bond buying (Chart 14). Notice how the share of corporate bond buying has been rising here.
Case in point: on Thursday the ECB doubled down on more of the same as it delivered more PEPP, longer PEPP, further reinvestments and an extension of favourable TLTRO conditions. Read more…
Opinion: The above European central bank economic maneuvers are really quite simple despite confusing sounding acronyms like PEEP and TLTRO.
- PEEP = pandemic emergency purchase programme
- TLTRO = targeted longer-term refinancing operations
- Translation = Europe’s central bank is printing money and buying government bonds and corporate bonds to hold down interest rates
- Reason = If interest rates were to rise, the entire economy of 27 European nations would collapse
- Irony = Printing money and mounting debt will eventually cause interest rates to rise to control inflation causing the euro to collapse anyway. But like a drug addict, Europe has no interest in going cold turkey.
What began in 2008 under a certain community organizer was/is terminal. Quantitative Easing (QE), creating new money to buy government debt, is a hopeless cycle in the same way as a dog chasing its tail, which is why I wrote the Bible Study: “The 1% and Revelation: Do Not Harm the Oil and Wine” HERE.
The world is racing towards the first Biblical global economic event of the tribulation – hyperinflation. It can happen suddenly as a result of a nation’s, or group of nations, shared currency plummeting in value.
You know the old cliche, a wheelbarrow full of money to buy a loaf of bread, is precisely what happened in post WWI Germany.
The Weimar financial crisis led to the rise of a man named Adolf Hitler who was seen as a savior. When the final dictator takes his place on the world stage it will be much the same before all (literal) hell breaks loose (Matthew 24:21).
His name is Antichrist.