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The Economic Consequences of Pandemic ECB QE

Emergency on Planet Earth

Ursula Von Der Leyen has been talking up the Green EU Deal today.

PhilanthroVaccinopolists

And her mate Melinda Gates was talking up (mandatory?) coronavirus vaccines yesterday.

There was a time when vaccine lobbyists could be called out for being too aggressive.

More ECB QE

Over at the European Central Bank things are very much focused on the pandemic. ECB President Christine Lagarde features in yesterday’s video.

But the real story is about Germany not wanting to help its neighbours.

France asked Germany to put money into a coronavirus fund and Germany said it would be happy to give loans to other countries, but not grants.

As a result President Lagarde said she would be happy to increase the ECB’s balance sheet by printing another €750 billion – €1trillion euros to buy a broad range of bonds from AAA Government bonds all the way through to non investment grade junk bonds.

This is highly controversial. It is interesting to see the language being used to describe these moves.

The PR people at the ECB only seem to have let this story out via the FT.

The term they repeatedly use to describe bonds that have been downgraded to junk status is “Fallen Angels”.

The ECB have already been buying bonds for a few years. They launched a QE programme in late 2014 to prop up the Euro and financial markets.

Some views from this morning.

Although we’re told this is a pandemic crisis, the IMF saw it all coming in October: