ECB QE Plan – It's Already Priced In

Who “doesn’t” think The ECB will disappoint markets with Thursday’s announcement of its “proposed” plans to initiate full-blown QE?

Draghi is well-known for his “silver tongue” – but it takes money to buy whiskey.

In order for Draghi to satisfy the “massive expectations” of Wall St. and the global investment community at large – he better have a lot of it. I’m thinking that anything less than “1 Trillion Dollars” ( which still won’t be enough to even make a dint ) will be seen as a disappointment, as markets have already priced this in.

The Germans are still very resistant to the idea, assuming they will inevitably be left holding the bag in supporting “the rest of Europe” with their own economic output, and as I’ve come to understand it – there are still several legal hurdles to be overcome before just ” cranking up the presses”.

It would not surprise me in the least to hear “suggestion” of QE to be rolled out later this year, or perhaps some “paltry amount” bullshit program aimed to temporarily shake the wolves off their backs – either way….it will do nothing to stave off the current economic spiral Europe finds itself in.

QE from The ECB will do absolutely nothing to change the trajectory of a further weakening European economy, a further weakening U.S economy, a further weakening Japanese economy – and the list goes on.

Short of a very near term bounce ( which we’re seeing now ) I expect another series of “long red candles” coming – “post ECB meeting” Thursday.



Quantitative Easing For Dummies

I just had to cut and paste the following graphic ( my apologies if proper credit is not given) as it best illustrates the significance and implications of the Fed’s QE money printing bonanza. Please take a good look at this – a real good look. Then consider the arguement of  ”inflation vs deflation” moving forward. I would be hard pressed to entertain idea of the dollar doing anything other than “going down” over the first half of of 2013 – minimum.

Inflation  is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. (thanks wikipedia) Trading it however – will most certainly not be as cut and dry.

this is how it looks in the literal sense