The ECB’s regular policy statement was announced today by President Mario Draghi and it was the typical central banking balance beam act of self-congratulation for the strong economy coupled with the conditional warning that was inflation was too low. This way, everyone should be thrilled that the economy is strong and yet the central planners don’t have to cut back on the monetary addiction.
It is assumed, of course, that unless the economy is experiencing 2% inflation rates (as calculated by their own statistical reference points), there’s still lots of printing work to be done. Deflation is to them the Great Enemy to be slaughtered.
But since it’s been nearly a decade of loose monetary policy in one way or another, and progress needs to be shown to justify their careers, they emphasize that the economy doesn’t per se need more stimulus. To satisfy both the need for more money creation and the bank’s trustworthiness, the ECB’s statement dropped reference to future interest rate cuts while at the same time refusing to slow the current pace of stimulus.
These miniscule changes in their posturing is supposed to be of great importance, a sign that the Planners really know what they are doing; they are fine tuning and perfecting the European economy.
But it’s all hogwash. They don’t know how to run an economy. They only know how to put on a great performance and create money with which to prop up assets and governments around the Eurozone. The game, as it always seems to do, goes on.
