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To Infinity And Beyond - ECB Piling Up Debt

YouKnowWhatIMeanLike

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Apr 13, 2011
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7,122


The ECB is piling up debt by the minute building a much much bigger bubble this time. We have already surpassed the 2012 peak and it looks like we are going to be at breaking point pretty soon where phantasm hits the wall of reality again. Impact on 2020 horizon might be a good guess.

 


Fractional Reserve

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Apr 30, 2011
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What amazes me is how they rationalise buying corporate debt.

The hypocrisy around state aid is astounding.
at least by buying corporate debt you might get some money into the system .Taking government debt and corporate of banks is bollocks they are shipping it off to the fed getting .50%
 
Last edited:

Lambic

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Just to note that the OP is implying that the ECB is borrowing.

It is not.

https://www.ecb.europa.eu/pub/annual/balance/html/index.en.html

It is purchasing huge amounts of financial assets, mainly Govt bonds, and paying for them by creating new liabilities.

The bank that sells the bond is paid by adding to that bank's reserves at the CB.

So there is no more assets/debt after the transaction, just the ECB is holding more of the assets.
 

Casablanca

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Jul 21, 2011
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7,328
Is the sky about to fall in ?

Will we cancel all direct debits today ?
It would certainly be safer to spread your risks. I suggest a mammal based currency. If only there was a thread about that.........
 

gerhard dengler

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Feb 3, 2011
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46,739


The ECB is piling up debt by the minute building a much much bigger bubble this time. We have already surpassed the 2012 peak and it looks like we are going to be at breaking point pretty soon where phantasm hits the wall of reality again. Impact on 2020 horizon might be a good guess.

LTRO's 1 & 2, QE and now buying corporate bonds, the European Central Bank appears to be taking the same route taken by Central Bank of Japan.

Before announcing the ECB corporate bond buying plan in June 2016, the ECB had already committed to purchasing sovereign bonds in March 2016 for on average €80 billion per month.


Bundesbank can't be happy.
 

YouKnowWhatIMeanLike

Well-known member
Joined
Apr 13, 2011
Messages
7,122
Just to note that the OP is implying that the ECB is borrowing.

It is not.

https://www.ecb.europa.eu/pub/annual/balance/html/index.en.html

It is purchasing huge amounts of financial assets, mainly Govt bonds, and paying for them by creating new liabilities.

The bank that sells the bond is paid by adding to that bank's reserves at the CB.

So there is no more assets/debt after the transaction, just the ECB is holding more of the assets.
:D
 

Watcher2

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Joined
May 2, 2010
Messages
33,894
Just to note that the OP is implying that the ECB is borrowing.

It is not.

https://www.ecb.europa.eu/pub/annual/balance/html/index.en.html

It is purchasing huge amounts of financial assets, mainly Govt bonds, and paying for them by creating new liabilities.

The bank that sells the bond is paid by adding to that bank's reserves at the CB.

So there is no more assets/debt after the transaction, just the ECB is holding more of the assets.
Assets on a banks balance sheets are actually debts though, no?
 

clearmurk

Well-known member
Joined
Apr 27, 2012
Messages
3,010
Just to note that the OP is implying that the ECB is borrowing.

It is not.

https://www.ecb.europa.eu/pub/annual/balance/html/index.en.html

It is purchasing huge amounts of financial assets, mainly Govt bonds, and paying for them by creating new liabilities.

The bank that sells the bond is paid by adding to that bank's reserves at the CB.

So there is no more assets/debt after the transaction, just the ECB is holding more of the assets.
The ECB is creating money with each asset purchase, is it not?
 


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