It has been some time now since the ECB turned to monetisation to deal with its sovereign debt crisis. At the time, the Germans were out in full force attempting to stop the train of events and keep the ECB out of the political economy. They failed. And the European crisis has been changed forever since. Now the Irish promissary note exchange scheme is bringing the Germans out in full force to rail against the monetisaton of sovereigns yet again. I predict these efforts will also fail. The ECB and Europe are turning away from the German central bank model and moving to a model more in line with the one used by the major central banks in nations with sovereign currencies. The Bundesbank’s futile railing against the ECB’s promissory note deal with Ireland is the latest example of the Germans’ waning power within the ECB.
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