The European Central Bank (ECB) recently imposed negative deposit rates and is preparing a form of quantitative easing (QE) to purchase asset backed securities, corporate bonds or possibly bailout bonds. This policy may seem surprising. Why would the ECB want to try to force banks into making bad loans, or consider implementing a policy of quantitative easing that has clearly been a total failure (with obvious unintended consequences) in both the USA and Japan? The answer lies elsewhere. Under the guise of avoiding deflation or “low-flation,” the ECB is, in reality, panicking and trying to save itself from the executioner’s axe. … Continue reading House of Cards