In the near future, perhaps we will see the nice big face of Angela Merkel in the 1 euro coin? [img class=sm






In this article, which is composed of 4 parts, I want to focus on what the EBC could do in the coming months to try to get out of the crisis which is stagnant in europe.
Mario Draghi spoke last conference of non-conventional measures, implying that the ECB would take into consideration the QE.
We see in this first part, what is QE?
Stripped of jargon sophisticated (and mystifying), the QE (quantitative Easing, QE) simply means increasing the quantity of money supply, or easing credit conditions in the hope of stimulating the economy stagnant. It is usually performed by injection by the central banks of a certain amount of money into the coffers of commercial banks in exchange for its financial assets, which consist largely of government bonds. Although typically is done electronically or on paper, its practical effect is identical to that which is obtained by printing money.

This would be an expansionary monetary policy designed to aid economic recovery. The rationale behind this policy is that the addition of new funds to the capital base of commercial banks (at an interest rate close to or identical to zero) will allow him to extend them once again lending to businesses and / or industries costs reasonably low so that the latter are encouraged to apply for loans to expand and hire, thereby creating growth and prosperity.

While in certain circumstances (when the supply of money or capital markets are tight, interest rates are too high and effective demand or purchasing power is strong) this can work, under the current market conditions (in where there is a lack of capital, the interest rate or cost of money is already low and the actual demand is very weak) is doomed to fail, as it is actually happening miserably.

Debt and investment for the production of goods are weak not because there is a shortage of investible funds (large companies are based on more than two trillion dollars in cash, but not taking), or because the cost of borrowing is too high, as is implicitly assumed by the QE gurus, but because aggregate demand is too weak and uncertain market conditions do not warrant investment and expansion. In addition, companies prefer to produce in their own country but where labor is cheaper globally.

Similarly, the reluctance of banks to extend credit to businesses is not due to lack of capital, but because they find it more profitable to invest in speculation, ie buying and selling of goods and / or securities such as bonds, equities, commodities , real estate, currencies and the like, destabilizing activities that tend to create asset bubbles, inevitably followed by bursts. Karl Marx used an even better metaphor to characterize parasitic finance capital:"The complete reificazion and the overthrow and the folly of capital as interest-bearing capital is the capital ... ... when it appears as a Moloch which claims the entire world as a victim due to him......next days PART 2
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