Bundesbank: criminal or incompetent ?

Discussion in 'Economics' started by C6H12O6, Aug 8, 2012.

  1. C6H12O6


    1975: the Bundesbank buys long bonds for 1% of GDP:

    The central bank is the Bundesbank, in 1975.
    The “mechanism” is purchases of government bonds to bring down interest rates, after the standard central bank tools stopped working that year. Indeed the Bundesbank bought up bonds to the tune of 1 per cent of German GDP.
    Interestingly, the information from that time suggests that the Bundesbank bought bonds because the economic outlook was deteriorating (GDP contracted 0.9% that year) and it was worried that further rises in long-term interest rates (from a 10.4% average in 1974) would threaten growth and drive inflation.
    Demand for longer-dated bonds plunged in the summer of 1975 as investors feared that soaring inflation would offset the returns on their investment. Reports suggest that the Bundesbank purchased bonds of a 6-year maturity and longer....

    2012: ECB buys 0.24% of GDP, and THEY oppose.

    Can you spot the difference ?
    in 1975 it was Germany
    in 2012 it's half Europe

    I'm afraid they are not incompetent.
  2. what do you want them to do? Lose money?

    Is that your demented view of the world?

    If the CB loses we all win?

    Thank g-d I was educated before they invented the "Department of Education."
  3. C6H12O6


    And in 1975 they were allowed to print and "lose money" because... ?

    The history does show up some Bundesbankers’ claimed guardianship of central-banking orthodoxy for what it is… an invented tradition.

    German bankers little liars :mad:
  4. It gets cold here in the winter, I print a little money to stoke the fire. What difference does it make if I let you use it before I burn it?
  5. Germans made more than €1 trillion off of Euro weakness (70% of EU exports, 10% global exports). They can afford to pay.
  6. C6H12O6


  7. History does not repeat, thank God.