I don't understand what the ECB is trying to do....
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•@SharkAce Here is a recent lecture by Hans-Werner Sinn. Explains the topic of interest rates/inflation and the ECB very well
Long video but informative https://youtu.be/C6cd9WXk_hU
Long video but informative https://youtu.be/C6cd9WXk_hU
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•@Tsubasa_172 2 hours you want to kill me xD but I'll take a look when I don't feel like doing my bachelor thesis, thanks
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@SharkAce Without zero interest rates, the southern Europeans would go bankrupt and the eurozone would fall apart.
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@Howsy89 But the current policy is only delaying this problem. It's more like "let's just look at it again"
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@SharkAce Politicians can't do anything else. If you want to take the southern Europeans to the curb, there will be uprisings like after the Greek bailout. If you want a strong economic union, you also need a strong economy. However, this is unevenly distributed across Europe. Inequality leads to redistribution to the benefit and detriment of some, which is why the euro is a failure.
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•That's exactly how it looks @Howsy89
The "southern states" and our neighbor France are dependent on cheap money, which is why interest rates remain low. As I said, rising interest rates could lead to riots, there are elections in France soon, why should a French ECB chief risk unrest in her country and a right-wing party that is clearly anti-EU winning in the end?
Moreover, the high inflation is practically a gift for the ECB. No one in politics would say this publicly, as this would also lead to unrest. The fact is, however, that inflation, along with other measures (such as a debt haircut, which was an issue in the EU for years but is now probably off the table), is one way of restructuring public finances. At the expense of the citizens, of course!
I think there will be interest rate adjustments at a low level, inflation will fall to 3.4 or 5%, the ECB will celebrate this as a success of the interest rate changes and Europe will be further restructured (at the expense of the citizens, of course).
That's my opinion, perhaps a bit of speculation but also a lot of truth if you think carefully about the context.
The "southern states" and our neighbor France are dependent on cheap money, which is why interest rates remain low. As I said, rising interest rates could lead to riots, there are elections in France soon, why should a French ECB chief risk unrest in her country and a right-wing party that is clearly anti-EU winning in the end?
Moreover, the high inflation is practically a gift for the ECB. No one in politics would say this publicly, as this would also lead to unrest. The fact is, however, that inflation, along with other measures (such as a debt haircut, which was an issue in the EU for years but is now probably off the table), is one way of restructuring public finances. At the expense of the citizens, of course!
I think there will be interest rate adjustments at a low level, inflation will fall to 3.4 or 5%, the ECB will celebrate this as a success of the interest rate changes and Europe will be further restructured (at the expense of the citizens, of course).
That's my opinion, perhaps a bit of speculation but also a lot of truth if you think carefully about the context.
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