ECB ending QE (money printing)

[errolanderson]

The European Central Bank (ECB) announced today that they will end QE by the end of 2018 and begin hiking rates in 2019 . . . .

The ECB has printed hundreds of billions of Euros over the past several years which virtually no inflationary response. Europe continues to battle deflation. Now they are ending this failed Keynesian policy cold turkey, plus hiking rates. Apparently, Europe must be in-recovery.

This decision could spark a deflationary spiral in markets (IMO). Many will disagree. But Italy will not be pleased. Emerging markets are getting hammered right now over this announcement. The USD is surging today as a result . . . the last thing U.S. export markets need right now as the gloabal trade war intensifies.

Commodity markets globallly could be hard hit. These bizarre economics decisions by central bankers still stem from the financial crisis of 2008, which was never repaired from the Lehman Bros collapse.

Central bankers kicking-the-can is now coming to roost (IMO) . . . .

[ajl]

Well they finally figured it out that asset speculation is not real economic growth in Europe. Too little too late IMO. It is no coincidence that the US economy started to grow after the FED stopped the QE. Europe has bigger problems than the US though. The biggest one is negative demographics. You simply can't replace home grown families with migrants.

[macdon02]

Who will buy govt debt with no QE?? Keep an eye on bonds gentlemen. The cure of '08 was for the benefit of govt not the people. Fueling a massive debt explosion so they could get elected because they know best how to handle money..... today rates continue to climb causing interest costs on that debt to climb. The hunt for taxes will continue with more carbon taxes and the rich have to pay their fair share, tax beef, pop, Netflix, anything and everything...

[biglentil]

Pass go and do not collect 200, free parking empty. Every game has a beginning and an end.

Printing dollars is inflation. Price inflation however tends to lag monetary inflation. Velocity drives booms and scarcity creates busts. Central banks walk a fine line by throttling the economic engine. Lose confidence of the market and people and there is no recovering from a total loss. Its a complicated and dangerous game they play, the stakes could not be higher.

[furrowtickler]

Pass go and do not collect 200, free parking empty. Every game has a beginning and an end.

Printing dollars is inflation. Price inflation however tends to lag monetary inflation. Velocity drives booms and scarcity creates busts. Central banks walk a fine line by throttling the economic engine. Lose confidence of the market and people and there is no recovering from a total loss. Its a complicated and dangerous game they play, the stakes could not be higher.

Very true , and the ones pulling the strings could care less about the 90% that pay the piper ...George Soros types ... you know , Peter Pans buddy 👎👎

[furrowtickler]

Also the same ones behind the climate change scam at the UN and such .
Problem is 90% of the 90% has no fukin clue.

[FarmJunkie]

What they gonna do when hyper inflation kicks in? Interest rates go up. More defaults. Governments default and the bond holders are left with an IOU that ain’t worth the paper it’s printed on. Tough times ahead. Cheap money caused all this. People think there rich (farmers or home owners) because they’re property is worth so much. Really? What’s a dollar worth? How far does it take u now a days? Zimbabwe coming to a country near you. Necessities are gonna be astronomical soon. Just wait for it.

[ajl]

What they gonna do when hyper inflation kicks in? Interest rates go up. More defaults. Governments default and the bond holders are left with an IOU that ain’t worth the paper it’s printed on. Tough times ahead. Cheap money caused all this. People think there rich (farmers or home owners) because they’re property is worth so much. Really? What’s a dollar worth? How far does it take u now a days? Zimbabwe coming to a country near you. Necessities are gonna be astronomical soon. Just wait for it.

Just to get it straight: QE causes hyper inflation and ending QE causes hyper DEflation. Think the 1930's or 1980's. During deflation commodities and real estate are toxic assets and cash is king.

[biglentil]

Hyperinflation is caused by a loss of faith in the dollars stability. Confidence in the purchasing power is really all that "backs" a dollar.

Even with large QE (money printing) without velocity price inflation will not happen either. Loose lending rules drive velocity(speculation) and asset price inflation.

Commodity prices are 'fixed' by central planners in futures markets to prevent a cost of living run up to keep the masses content.

[Hopalong]

See gold down $20.00 $US this morning, does not match with most of this thread comment.
Any explanation?

[biglentil]

See gold down $20.00 $US this morning, does not match with most of this thread comment.
Any explanation?

A rapid rise in gold is a big black eye for confidence in the dollar. Hence the gold price smash.

[ajl]

See gold down $20.00 $US this morning, does not match with most of this thread comment.
Any explanation?

USDX strengthening so bearish for gold and other commodities. Elementary. Dollar bears will have to wait for yet another day. How long has it been now?

[errolanderson]

Major deflationary pressures across global commodities. Gold struggles in this environment. Trend lower for precious metals (IMO) without a geo-political shock.

[Rareearth]

Did the policies of QE work in the minds of governments?

The answer is yes, and yes debt is higher but everything is relative.

If it worked once, likely to see again in the future?