THE BCE NOT PREPARES THE BILLS OF THE DESPERATION OF THE RECOVERY

The European Central Bank is clever to relax its politics in March if the recent turbulence of the financial market or long term impact of the low prices of the energy threaten to maintain persistently low the inflation, Mario Draghi has said. "First we will examine the strength of the cared effect from the drop inflation to the domestic wages and the formation of prices and to the inflation" expectations, Draghi said to the Committee of Economic and Monetary Matters of the European Parliament.  

I interpret that what Draghi means is that this in a countable labyrinth because thank you the politics of cuttings that it demands the economic commission of the CE, the wages every time they are lower, to palliate that he goes well that the inflation is low also, but if the inflation is low, the payers of wages cannot make more than to continue lowering them, because they don't obtain benefits because there is not consumption for the low ones that the wages are, to understand this phenomenon it is not necessary I believe me the BCE. but in short they make you bills.  

"Second, continuous Draghi, in view of the recent financial turbulence, we will analyze the state of the transmission of our monetary impulses in the financial system and in particular in the banks". I Continue without understanding that it is what is necessary him to study Mr. Draghi, is that you don't still see that its monetary impulses are of a round trip effect, that is to say, the BCE emits 60000 or 80000 million Eurus (I am not sure now of the current quantity) a month he gives the money and he receives active of doubtful quality and great part of the borrowed Eurus that the banks enter them in their deposits. 

But it is that that money, of that famous QE doesn't go to the consumption neither the investment, neither public neither private, the banks return it to their deposits although they have to pay him negative interests, because there is not activity where to invest them or the one that there is doesn't trust that this it is other, so the BCE already has so many Eurus in their deposits that for that reason instead of being depreciated to facilitate the competitiveness of the UE happens the opposite, he revalues and he makes to buy in Eurus to be immediately cheaper and to sell more expensive.  

With this what is gotten is to lower the competitiveness of the European products that together to some lower costs in the import makes that these two effects, next to the drop production and low wages, the inflation is negative. So friend Draghi is not necessary that analyzes much more because these two factors together bear risks to the drop for the stability of the prices, so don't doubt to act, but please before studies well as. 

The comments of Draghi take place after weeks of a high volatility in the market that has reverted great part of the effect of monetary relaxation of the BCE in December, increasing the pressure on the bank so that it relaxes it even more in March. Draghi has already said that the bank will revise and it will possibly recalibrate its politicians when he meets the next one March 10, a sign that the markets take as an almost sure commitment that it will act. 

The euro has strengthened 3 percent in so far in year, while the bags of the area euro have lowered 13 percent, increasing the financing costs for the companies. As you see the things they leave him the other way around, so maybe the correct thing would be to move away monetary stimuli and to invest directly in the companies and in projects and not in sovereign debt and in central banks that the only thing that they make is to increase the speculation or it is that they don't still come it in the BCE. you have to become the central bank of the non-alone UE in the bank of the banks and the governments, but of the industry and the private companies of the European Union, it is there where the possibility of the reactivation is, not giving Eurus to the banks that like he said before they return them to him, or they invest them in dollars, or in financing the debt of their countries. 

But maybe more important it is the slope of 22 percent in the bank sector that can elevate the capital cost for the banks, that that potentially can stop the credit and to reduce the effectiveness of the non-conventional measures of the BCE. but this situation has created it the own banks because they don't make use of the Eurus that you give them and they don't make it because on the other hand you press them with some demands of "Core capital" that hinder them completely, because this makes that they cut the credit to the private and alone initiative they take a risk with the states or the companies public semi monopolies and neither much that is to say are totally intimidated.  

Indeed as you he says "The situation now in the bank sector it is very different to that of 2012", the banks of the area euro have strengthened their capital positions in the last years, mainly as consequence of the exhaustive evaluation carried out in 2014", it is certain but you already go that it has gotten we return to the starting point it doesn't serve as anything that the banks have a good capital ratio if they don't have business because they eat up it or they invest it in financial engineering, sew that he doesn't take place more than bubbles, wonder it to the Deutsche Bank, and they explained to him it or to the BNP etc. All the banks still confront difficulties, from the uncertainty for litigations and restructuring costs until a great delinquency level, and the delinquency didn't finish until the "doubtful" ones stop to be it because the economic activity in the UE is reactivated in a clear way and the euro is devaluated at least 10%. 

Well if the BCE is clever to act me he loved to see it and mainly it forms in what it acted, I agree also he already said some days ago it in that it corresponds to the countries to its governments to open the career of the expense and the investment so that they help with fiscal politicians of support that elevate the public investment and help to the economies with some smaller taxes but this please says it in a meeting of the commission of economy of the UE because this he requests just the opposite it asks the governments to clip that they lower the deficits that clip wages pensions you subsidize etc. etc. please Comes to an agreement. Of, the opposite their purposes won't serve as anything no matter how much he tries to punish the economic cowardice of the governments of the UE 

In December the BCE reduced its type of deposits in 10 basic points to -0,3 percent and it prolonged its purchase plan of active in six months, taking the program until the 1,5 trillion Eurus. The markets discount two discounts of types now at least, taking the types has more than enough deposits to -0,5 percent for final of year from -0,3 percent. But the analysts are more cautious and they only wait a slope to -0,4 percent, but this has already said it before this is not good to reactivate the economy this the tight one. 

The money Mr. Draghi is not to punish him so that it leaves to the market, what it is necessary to make is to motivate it so that he makes it, this it is the way and not what they are making the money doesn't come out because you don't see a security that him of benefits, alone you see an UE invaded by the doubts and for the millions of immigrants that he doesn't know how we will maintain them or where we will give them work if the Europeans don't have it, you go that soon the Chinese steel entered with what the factories of the industry ended weighed in Europe, you go that the industry for example VW has to make traps to compete in the USA with the Japanese cars, in short so that I will count him more than you don't know… or it is that he doesn't know it or they don't count it to him.