Posted Aug 23, 2014 by Martin Armstrong
Those in government are just way too dangerous because whatever they see never involves themselves as a cause. Now Mario Draghi, head of the ECB, has bluntly stated that the Ukraine crisis is one of the reasons why inflation does not start in Europe. Deflation would be dangerous especially for all debtors because it makes the real payoff on debt rise, which Draghi understands. This is why the ECB chief wants to use all available means to pump billions more of euros into the market to reduce the real cost of government debt. Draghi gave no further explanations as to why suddenly the Ukraine shall be responsible for the overnight low inflation in the Eurozone or what we should now call Euroland to denote the true fantasy.
Government just cannot admit that if you earn $10 and the government is taking $6, disposable income declines and this results in deflation. Sorry, but even Keynes stated to stimulate a recession you lower taxes. The IMF proposal of raising taxes and confiscating assets in banks is simply not supporting any kind of economic recovery. This is just typical French economic madness.
Welcome to Euroland where all rational reason is sinking rapidly and taking the whole world economy with it – 2016-2020.