Posted by WARREN MOSLER on December 23rd, 2011
As if QE is an inflationary bias.
They are all clueless.
MMT to the ECB:
QE addresses the solvency issue, not ‘deflation’ or aggregate demand issues.
By Gabi Thesing
Dec 23 (Bloomberg) — European Central Bank Executive Board member Lorenzo Bini Smaghi said that policy makers shouldn’t shirk from using quantitative easing if deflation becomes a danger to the euro region.
“I do not understand the quasi-religious discussions about quantitative easing,” Bini Smaghi, who will leave his post at the end of the month, said in an interview published yesterday by the Financial Times. The ECB confirmed the comments. “It is appropriate if economic conditions justify it, in particular in countries facing a liquidity trap that may lead to deflation.”