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162 sats \ 1 reply \ @Lost_dogz 12 Feb \ on: Public Debt: Japan provides the blueprint econ
Small nuance here: the ECB is only buying up some countries' bonds, and intentionally NOT some other countries' bonds to prevent the yield spread between the fiscally sound Northern and fiscally unsound Southern euro area members growing "too big" (i.e. reflecting the real default risk).
This basically means citizens from the northern Member States are paying a higher than necessary interest rate (via taxes) and the inverse goes for citizens from southern Member States. Essentially a wealth redistribution from North to South
It's euphemistically called the "Transmission Protection Instrument" 🤦♀️
absolutely correct. a few months ago I came across a statistic that showed that the southern states of the eurozone have not sold any new imitation government bonds on the free market for about 7 years. they went directly via the banks to the ECB. A disaster. zero interest rates for the start high capital costs for the private economy, leading to the crowding out of the economy. a total decline
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