ECB will not start QE, as it is always in QE
Mario Draghi’s comments on bond-purchases are nothing else than a verbal attack on the Euro as a part of global currency war. You don’t need to worry on ECB starting to print too much money, simply because it is already printing. And printing heavily.
The latest results of Greece, Spain and Portugal bond sales showed an enormous demand and that led to very low interests paid on them. For countries that are de facto defaulted this simply means someone with “easy money” has appeared on the market and is buying. And that is exactly equivalent of quantitative easing.
Market frenzy: Portugal more reliable than Russia
It is interesting to see in one and the same day Russia failing to sell its 9-year government bonds, while Portugal marking an enormous demand and record low interest rates. Russia is a country with a debt of less than 10% of GDP with balanced budget in most of previous years. At the same time Portugal is defaulted country with constant deficits and a debt of 130% of GDP. It had to be bailouted very soon.
Read more...ECB outplays Harry Potter in magic
After the surprisingly successful Greek bond sale now new data appeared on "increasing interest" in... Spanish debt. But in Spain almost nothing has changed since the times the country bankrupted and had to use help from EU bailout funds. Yes this default was not official like with Greece. Instead a direct help for banks was given without formally passing through government. Anyway it was an external aid on non-market basis, i.e. it was de facto a partial default. And now - just like with Greece - an enormous interest in Spanish debt.
Ukraine heads for a Hollywood peace path
Few days ago in Geneva Russia and the West completed an agreement on Ukraine crisis. Now is clear this agreement means absolutely nothing. That logically leads to a conclusion that Great World powers have already divided Ukraine into zones of influence and all negotiations are only a theater before these decisions go real.
The most important decision that could change the situation is de facto unrealizable. Russia and USA agreed to disarm all non-government militias and free the occupied government buildings. But only hours after the agreement both Kiev’s Maidan and Eastern Russian separatists refused to execute it.
USA plans no balanced budget in next decade
Looking at the proposed by Obama new budget draft, we can tell nothing else than “madness”. The government does not even think of balancing its spending. There is no year planned in next 10 years to have an income equal to expenses. The only difference between years is exactly how much will be the deficit. In “good” years it will be “only” $500 billion, while in “bad” years it will reach $800 billion. Simply said, USA will continue being in debt-spiral that can lead nowhere else than in a heavy default.
Read more...
