Tuesday 4 May 2010

ECB are effectively going to monetise Greek debt

According to Bloomberg yesterday, the European Central Bank (ECB) have stated they will accept Greek government bonds within their asset swap program, regardless of the fact that the credit rating on those assets does not meet the stated requirements for the program. http://www.bloomberg.com/apps/news?pid=20602007&sid=aTAygysllnxM

On 4th March 2010 I said "I smell a back door bailout of Greece here". To my mind, the Bloomberg story above appears to confirm this theory. In which case, the ECB just lost itself the reputation for fiscal prudence it had enjoyed up until now, and the euro will not be rebounding against the Dollar any time soon.

No comments:

More commentary at the Facebook page

Visit the page to find more news, commentary and community... (Like the page and you'll also see comments on links above - jus sayin.)

Twits can also apply here...