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Great comment. Can you explain what 'Germany must let the ECB monetize the debt.' means exactly?
by phreeza 14y ago
Great comment. Can you explain what 'Germany must let the ECB monetize the debt.' means exactly?
- deleted 14y ago[deleted]
- maigret 14y agoFlood the debt with inflation ;) That means the ECB buys the debt basically, but of course it creates the Euros out of nothing, so that creates more Euros for the same economical situation. The reason behind that is that if the ECB buys the debt, it can keep the rates under a certain level, buying everything that's above with its - theoretically - unlimited buying power. Of course that has a few flaws. The Euro is then less valued, so that's a reason more for wanting even more return on bonds.