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EUR not holdings its gains - getting ugly
- Thread starter Alexandre
- Start date
I posted this on another thread, but I'll repost it here too:
The EURO didn't move much, however the the sovereign yield spreads on the peripheral eurogroup countries (PIGS) have fallen DRAMATICALLY.
It makes sense if you think about it, the eurogroup is shifting the burden from the PIGS to everybody else, basically spreading out the pain. So net-net the euro currency is in the same position as before. In fact, probably worse due to the inflationary effect of this program which is for all intents and purposes quantitative easing.
The EURO didn't move much, however the the sovereign yield spreads on the peripheral eurogroup countries (PIGS) have fallen DRAMATICALLY.
It makes sense if you think about it, the eurogroup is shifting the burden from the PIGS to everybody else, basically spreading out the pain. So net-net the euro currency is in the same position as before. In fact, probably worse due to the inflationary effect of this program which is for all intents and purposes quantitative easing.
What does it have to do with the Euro? The Euro is coming off, because the mkt is getting convinced that all this "sterilization" talk is rubbish... EZ peripherals are holding quite well here.
Quote from palenimbus:
purposes quantitative easing.
Ok, I understand why central bankers hide under complex words like quantitative easing
but why should we?
I propose to ban everyone who use "quantitative easing" here
"money printing" what it is
compare
we defend euro by quantitative easing
or
we defend euro by money printing
aslo, we must not forget that by buying its own bonds through the ECB, the Eurozone is kind of committing incest.
Instead of reassuring foreign investors, it freaks them out. These foreign investors are more than happy to be finding a bid for their greek, portuguese and spanish bonds through the ECB.
Effectively, by buying its own bonds, the eurozone is diminishing its future capabilities to raise cash through foreigners
and
foreigners that still hold euro zone bonds may soon realise how dangerous are the actions taken by european central banks
the dog is biting its own tail
Instead of reassuring foreign investors, it freaks them out. These foreign investors are more than happy to be finding a bid for their greek, portuguese and spanish bonds through the ECB.
Effectively, by buying its own bonds, the eurozone is diminishing its future capabilities to raise cash through foreigners
and
foreigners that still hold euro zone bonds may soon realise how dangerous are the actions taken by european central banks
the dog is biting its own tail
Quantitive easing is just a fancy buzz word made up by economists.
Aside from printing it also means to artificially fix interest rates, double checked on wikipedia awhile ago lmao but yeah, believing anything that comes from the government is about the most stupid thing one can do at this point.
Aside from printing it also means to artificially fix interest rates, double checked on wikipedia awhile ago lmao but yeah, believing anything that comes from the government is about the most stupid thing one can do at this point.
Well, given what the other CBs have already done, no foreigner in their right mind should own either Treasuries or Gilts. How did someone put it? It's about who appears to be the best looking horse at the glue factory... Don't think the Eurozone is the worst, to be honest.Quote from Alexandre:
Effectively, by buying its own bonds, the eurozone is diminishing its future capabilities to raise cash through foreigners
and
foreigners that still hold euro zone bonds may soon realise how dangerous are the actions taken by european central banks
the dog is biting its own tail