Tag Archives | Mario Draghi


Markets question central bank power as Great Reckoning nears

TIME magazine covers often capture the mood of a moment.  And that was certainly true in February 1999, with their now famous cover picturing then US Federal Reserve Chairman, Alan Greenspan, under the heading “The Committee to SAVE the World“. In a further sign of the times, Greenspan was flanked by the US Treasury Secretary […]

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Brexit Oct16

Markets doubt Carney’s claim to have saved 500k UK jobs

Last week as the BBC reported, Bank of England Governor, Mark Carney, explained to an audience in Birmingham that the Bank had saved the UK economy after the Brexit vote in June: “Between 400,000 and 500,000 jobs could have been at risk if the Bank had not taken action after the referendum, he said.  ”We are willing […]

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Deflation Jul13

Central banks head for currency wars as growth policies fail

The world’s central bankers would have been sacked long ago if they were CEOs running companies.  They would also have been voted out, if they were elected officials. Not only have they failed to achieve their promised objectives – constant growth and 2% inflation – they have kept failing to achieve them since the Crisis […]

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“Debt-financed growth model has reached its limits”, admits German finance minister

Central bank policy-making is becoming more and more dysfunctional, as German Finance Minister Wolfgang Schäuble‘s comments highlighted on Friday: “The debt financed growth model has reached its limits.  It is even causing new problems, raising debt, causing bubbles and excessive risk taking, zombifying the economy….and may have laid the foundation for the next crisis.” One clear sign […]

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Brexit poll creates UK, euro interest rate rise risk

Financial markets are very bad at evaluating political risk.  They assume people will always be rational, and expect a ‘business as usual’ scenario to continue.  But as we all know, people are not always rational.  And emotion, as today over immigration may cloud their judgement. This week has seen the first signs of this complacency […]

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Nikkei v Shang Feb16

Tokyo, Shanghai stock markets fall; yen rises 8% in 2 weeks

Pity poor Janet Yellen, you might say.  The head of the US Federal Reserve told the Senate last week that she had been “quite surprised” by the collapse of oil prices since mid-2014.  And she added that the rise of the US$ was similarly “not something that we had expected” (you can see the testimony […]

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ECB President has New York temper tantrum as Board blocks major new stimulus

“There is no doubt that if we had to intensify the use of our instruments to ensure we achieve our price stability mandate, then we would.”  (Mario Draghi, New York, Friday) Pity poor Mario Draghi, President of the European Central Bank (ECB).  He is used to the adulation of markets – and adores his nickname […]

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Markets need more cash from the Janet Yellen tooth fairy

Central banks have acted as the proverbial tooth fairy towards financial markets in recent years.  But they have not just left a small amount of money under the pillow when a child lost its first tooth.  Instead they have printed trillions of dollars via Quantitative Easing (QE), to persuade investors to buy shares and commodities, […]

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European interest rates go negative as Draghi boosts stock markets

Historians will not look kindly on Mario Draghi, head of the European Central Bank. They will ask what he thought he was doing, issuing an extra €1tn ($1.05tn) of debt from March 2015, when the Eurozone was already struggling under a dead-weight of government debt: In the big countries, Italy has $47k of debt per person; […]

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Eurozone joins Japan’s ‘currency war’ versus the US dollar

The last 10 days have seen turmoil in major currency markets: The Swiss National Bank gave up trying to devalue versus the euro, and the franc jumped 30% in minutes The European Central Bank (ECB) launched its €1tn Quantitative Easing (QE) programme, causing an immediate 3% fall in the euro’s value versus the dollar These are major moves by any historical […]

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