So, finally, the world’s most open conspiracy came to full fruition and Magic Mario actually got to do a little of ‘whatever it takes’ after 2 1/2 long years of bluster. Sweeping aside the objections of what appears to have been most of Northern Europe, the triumph of the Latins was near complete. For all his stubborn resistance, Jens Weidmann proved no Arminius and the airy council rooms of the ECB building in Frankfurt no Teutoburger Wald whose mazy forest tracks and swampy margins proved so deadly to the legions of that earlier Roman legate, Publius Quinctilius Varus.
Category Archives: Europe
Tell me another!
In the wake of the SNB decision last week to remove its infamous 1.20 euro floor rate, the ever ingenious – and no less self-assured – Willem Buiter has been expressing his outrage that any central banker might dare to deviate from a consensus which shares three articles of faith, each engraved by the Deity on the tablets he handed down to His prophets at MIT.
Let’s be Franc about it
On Wednesday, we were all utterly not shocked to learn that the Advocate-General of the European Court of Justice, Pedro Cruz Villalón, had decided that he could see no major objections to Mario Draghi’s Fed-wannabe programme of so-called Outright Monetary Transactions – a decision upon the legality of which was earlier referred to that august body by the German Constitutional Court like the hot potato it was.
Though Snr. Cruz Villalón’s decision is not binding – a decision of the full body sometime in the middle of the year is needed for that to occur – it was nevertheless highly suggestive of the way the court might rule and was therefore seized upon by stimulus junkies everywhere as a result.
Vraiment, quelle surprise!
Traditionally, this is a time of year when all we pundits try to garner headlines by setting out a list of ‘surprises’ for the coming months. At root, it is not hard to recognise this as an exercise in self-contradiction since a surprise you can predict is obviously not one worthy of the name. What we, as a class, therefore tend to produce is either a set of low-conviction forecasts which we prognosticators fear to issue on their own merits lest we incur the derision of our peers, or a catalogue of cod attempts at trying to escape briefly from a consensus to which we still hew.
Shovel-ready, Spin or Chicanery?
In his Life of Pericles, the Roman author Plutarch wrote that, having won the people away from his adversary Cimon by spending their own money on the entertainments and spectacles he laid on for their diversion, his eponymous hero further consolidated his hold on power by daring to spend his allies’ tribute (read: tax payments) on a lavish programme of public works rather than holding them, as was supposed to be the case, in reserve for use in time of war.
As Plutarch puts it, as well as building up a powerful fleet to patrol the sea lanes of his world – with the aim not just of cowing friends and foe alike, but also of securing the support of those who derived their living from military service – Pericles turned his attention to addressing the effects of ‘secular stagnation’ plaguing those who remained in Athens:
The Invisible Hand & its Visible Shackles
As the European economy finds itself yet again adrift in the windless doldrums of slow to no growth, the only quack remedy being discussed is still the same old spend-now-worry-later Keynesianism. Despairingly universal is the refusal even to contemplate the fact that what is holding the economy back is not a lack of spending, but rather the frustration of the will and the pre-emption of the means to increase profitably saleable production. That the best thing for the state to do is less, not more, of whatever it has been doing and to allow the people the freedom to do more of what they chose to do of their own volition is far too radical a solution to embrace for a leadership which has already forgotten that the same academics telling them to ‘keep calm and carry on’ with a failing set of curatives are the ones who all too briefly had the grace to question their core methodology in the aftermath of a Crash which, almost to a man, they failed to understand when it was in full swing, much less to predict in advance of the break.
East of Eden with the ECB
“In the sweat of thy face shalt thou eat bread, till thou return unto the ground; for out of it wast thou taken: for dust thou art, and unto dust shalt thou return.”
Or so a rather angry Jehovah was said to have thundered at Adam when he cast him out of the Garden for committing the cardinal sin of developing self-awareness. Ever since, the story goes, mortal man’s lot has been a sorry one of incessant toil, the inevitability of his demise and – for his beloved partner – the anguish and deadly peril of childbirth.
So, if we could persuade a forgiving God finally to relent and to repeal our sentence, giving us safe passage back out of the Land of Nod to the primaeval, care-free paradise of our creation, do you think His mercy would be well-received by those who presume to rule over us here and now in the earthly realm?