The European Central Bank Is Trapped Like the Federal Reserve

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Mises Institute: The eurozone’s annual price inflation rate hit 5 percent in December 2021 and (as of this writing) the consensus is for 5.1 percent in January 2022. Eurozone industrial producer prices were up 26.2 percent in 2021.

This has been pressuring the European Central Bank (ECB) to adopt a tight monetary policy (or at least a less loose one). On February 3, the ECB announced its monetary policy decisions regarding the Pandemic Emergency Purchase Program (PEPP) and the Asset Purchase Program (APP), its asset purchase programs, and interest rates, with no major changes compared to the previous announcement in December.

The ECB Is Trapped

Like the Fed, the ECB does not have much room to raise interest rates without causing major complications in the financial market and the economy. In addition, its asset purchases, mainly of eurozone government bonds, are what keeps its interest rates artificially low and by extension the costs of financing these governments’ budget deficits artificially low.

Therefore, it is the ECB that has kept the interest rates on these bonds artificially low. Thus, the ECB does not have much room to raise interest rates and decrease (or cease) its monthly asset purchases. Countries like Portugal, Spain, Italy, and Greece, which have higher debt and more profligate governments, are very dependent on this monetary policy. Read more

Opinion: Is it baffling to anyone else that with inflation at a 40 year high, the Federal Reserve in its January meeting, decided NOT to raise interest rates until March?

I’m not an economist, but simple logic would suggest that if I get diagnosed with Covid today, I won’t wait until spring to get treatment. What that says to me is that the Federal Reserve and the European Central Bank are indeed … trapped.

Money printing is now the life blood of western economies and that, is prophetic.

The West (US/EU) had many chances to do the right thing since the 2008-9 financial crisis. While he was running for president, Barack Obama actually got something right:

After being elected president, however, Barack and his Treasury Secretary, Timothy Geithner and Federal Reserve Chairman Bernanke, got out the printing press and by 2013 created $4 trillion in counterfeit dollars. By the end of his term in office, Barack doubled that ‘unpatriotic’ debt, claiming he saved the economy from depression.

The money printing never really stopped, it simply continued under President Trump with innocuous names like ‘twist’ and ‘repos’ and by the time Covid hit our shores in 2020, the Fed came to the rescue with $6.8 trillion in fiat money and a pledge to provide $1.5 billion per month in more stimulus.

April 19,2020:

So, my friends, with the national debt now over $30 trillion, and inflation at 7.5%, Fed Chairman Powell says it’s now time to act … but we will wait until March.

THE REST OF THE WAY: STRAW AND THE CAMEL'S BACK

Our Bible tells us that one day, the western economy will break. In the same way that Germany’s hyperinflation gave rise to Adolf Hitler, future hyperinflation will give power never seen before to a new world leader.

‘The fourth beast shall be
A fourth kingdom on earth,
Which shall be different from all other kingdoms,
And shall devour the whole earth,
Trample it and break it in pieces.” Daniel 7:23

He is Antichrist (Revelation 13:1)

See our paper “The 1% and Revelation: Do Not Harm the Oil and Wine” HERE