Draghi’s Deadly Derangement

david_stockman_2David Stockman, David Stockman’s Contra Corner, 3/9/16

Yes, the man is totally deranged, and so is the entire eurozone policy apparatus. Like much of officialdom elsewhere in the world, the ECB is attempting to fight low growth and low inflation with monetary nitroglycerin. Its only a matter of time before they blow the whole financial works sky high.

Low real GDP growth in the eurozone has absolutely nothing to do with the difference between 0.3% on the ECB deposit rate versus the new-0.4% dictate announced this morning; nor does QE bond purchases of EUR 80 billion per month compared to the prior EUR 60 billion rate have anything to do with it, either. The only purpose of such heavy handed financial intrusion is to make borrowing cheaper for households and businesses.

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David Stockman is a former Republican congressman from Michigan and was President Reagan’s budget director from 1981 to 1985. After leaving the White House, Stockman became a managing director at Salomon Brothers, and he later founded a private equity fund. David is the founder of David Stockman’s Contra Corner, and he is the author, most recently, of The Great Deformation: The Corruption of Capitalism in America.

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