Jim Grant: The ECB will print money

Jim Grant spoke to Bloomberg News earlier today about the sovereign debt crisis. He says the fundamental question is "What will the European Central Bank do next?" His answer: they will "print money". He believes that all of the central banks are doing it now, the ECB being the last to take this step. Grant fears that the ECB is "heading for trouble" by taking on so many "dicey" assets and speculates about the institution’s solvency and leverage.

These are exactly the issues holding the ECB back. But the imperative to prevent a collapse in Italy is forcing its hand. Video below

10 Comments
  1. Sean says
    1. David Lazarus says

      Italy has a severe demographic problem. The population are not even at replacement rate. Forecasts are for the population to fall to 18 million by the end of the century. Under those conditions there needs to be a change in government policy to make it sustainable. That might explain its savings rate to some extent.

      1. Albert8184 says

        Yep.  Just what are they putting in the water over there to produce this result in the native population of every European country?  What is going on?

        1. David Lazarus says

          They have a remarkably late family formation age. That limits the size of the family. It might be down to real estate prices as this is the reason in the UK that we have a similar problem. The costs of setting up that first home can be immense and that can have other problems, such as low birth rate, inability save sufficiently for retirement and have a family, plus the costs of living are also a deterrent. 

          1. Albert8184 says

            Interesting. thanks for the insights. The US is following in these footsteps. Over here, the only ones breeding are the third worlders. Western civ is in trouble.

      2. Anonymous says

        Yep.  Just what are they putting in the water over there to produce this result in the native population of every European country?  What is going on?

        1. Anonymous says

          They have a remarkably late family formation age. That limits the size of the family. It might be down to real estate prices as this is the reason in the UK that we have a similar problem. The costs of setting up that first home can be immense and that can have other problems, such as low birth rate, inability save sufficiently for retirement and have a family, plus the costs of living are also a deterrent. 

          1. Anonymous says

            Interesting. thanks for the insights. The US is following in these footsteps. Over here, the only ones breeding are the third worlders. Western civ is in trouble.

  2. Ann Droid says

    Its very easy to come out with this trash. You really need to explain how this squares with EU politics.

    1. Sean says

      Will effect consumption”..

      I think that might explain it.

  3. Kristi says

    The Europe’s path is going to be inflationary, but it’s still too early for the ECB to announce some sort of QE. Maybe ECB never does it, but the SMP (despite of the talks about sterilization) is a smart scheme for printing money already.

    I guess the plan is to “squeeze” the foreign creditors and investors as much as possible. The leveraged EFSF is the tool. (Otherwise Lagarde would not talk this way with the Chinese people as she does.)

    Read the analysis here: http://blog.logicoffinance.com/2011/11/europes-debt-crisis-tragedy-or-show.html

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