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Is the ECB still working in the interest of the European people?
Since the real estate crisis in 2007 which triggered the debt crisis in Europe the ECB monetary policy is still stuck in the Jackson Hole Consensus legitimating the flooding of the financial markets with cheap money in unseen quantities (1). With each passing year our chances are rising that the next asset price bubble is building up in Europe and elsewhere leading to an even bigger crisis driving ultimatively people into poverty.
If we look at the economic science behind the actions of the ECB we ask ourselves if this science tries to describe reality or just follows the wishes of the powerful (2)? At first sight this question may be seen as polemic. So let's ask another question: how can a science describe reality with theories coming more often than not to the opposite outcomes than the developments in the real world are showing us?
The best example of this principle is Eugene Fama a Nobel Price winner in economics in 2013, the founder of the "efficient-market hypothesis" which is proved wrong each day by economic actors making all the time mistakes. He proclaimed that asset price bubbles don't exist because of the highly dubious assertion that economic actors are infallible when acting on perfect information level (3). (is perfect information level calculable?) We can only wonder if investors still take economists seriously!
Therefore the EOZB urges the ECB to do the same before their QE-Policy will bring down the economies of Europe like a Phoenix falling from the sky like a burning star (4). As it seems the ECB monetary policy only favours the needs of the new sovereigns to come. Thus we ask the new ESRB (Euro Stability Risk Board) to make an overdue inquiry in the risks of the vast money supply expansion and tell the board of the ECB about it - but be fast!
If the economists at the ECB are not reading their own papers, as it seems, we can only hope that they at least are reading the Financial Times from time to time, lately questioning economic role more often speaking of their quality journalism. Accordingly to a new report of PricewaterhouseCoopers, immense amounts of cheap money are flooding the European real estate markets driving prices especially in the hardest hitten countries by the dept crisis (5). If their report is sound, the ECB should ask itself if Europe is ready to face the next real estate or asset price bubble like the one some years ago made by the FED and the Bush administration? (Currently the economists at the EOZB are developing their own market hypothesis aiming for the Nobel Price in economics in 2014: "the fam(a)ous efficient market hypocrisis"!)
Our new founded intelligence agency the NOSA (National Occupied Security Agency) suspect's that the loyalty of Mr Draghi is still lying with his old employer "Goldman and Partners". Apart from the disastrous results of the austerity policy of the Troika our never sleeping spy agency told us about the current discussion on the new TTIPS agreement. This trade atrocity wants to strip the people of Europe of any defence against the wishes and need's of the so called "free markets". The outcome will defy another Holy Grail in economics once misinterpreted from just one single sentence in Adam Smith's famous work on the wealth of nations - now destroying it efficiently!
This made our intelligence people believe that the European Commission is also not acting in the interest of the European sovereign. In case you don't know - it's the people of Europe. Out of these reasons and many more the board of the EOZB backs the findings and demands of the European Parliament enquiry report on the austerity politics of the Troika which will be released soon (6).
The report was a result of all the irregularities which accompanied the austerity policy and rescue measures of the Troika defying not only European law, but also resulting in poverty and protests all around Europe. The report comes also to the conclusion that adequate economic models are necessary in order to produce credible and efficient adjustment programmes. Maybe the ECB should ask for advice the institute of New Economic Thinking financed by Georg Soros out of his contempt for modern economics and their obvious frutile attempt to make everything accountable in money despite easy variables like salaries. In the end the report proposes that the EU Commission's representatives should be heard in the European Parliament on their austerity measures on a regular basis.
At this point we strongly suggest that this should also count for Mr. Draghi justifying the ECB monetary policy before the Parliament each month and asking for permission thus bringing our central bank out of reach of private interests of the too-big-to-fail und too-big-to-jail institutions with their addiction for cheap money making the next crisis a self fulfilling prophecy!
At this point we strongly suggest that this should also count for Mr. Draghi justifying the ECB monetary policy before the Parliament each month and asking for permission thus bringing our central bank out of reach of private interests of the to big to fail und to big to jail institutions with their addiction for cheap money making the next crisis a self fulfilling prophecy!
Further the EOZB ask's the staff of the ECB to answer the upcoming questions of our Parliament truthfully:
Thanks for your civil courage and responsibility for the three hundred million people in the eurozone!
1. Asset Prices and Monetary Policy, Otmar Issing
2. What are economists for, anyway? Institute of new economic thinking, Executive Director Robert Johnson
3. Nobel Prize Winner: Bubbles Don’t Exist, Casey Research
4. "Restoring Household Financial Stability after the Great Recession: Why Household Balance Sheets Matter" research symposium sponsored by the Federal Reserve Bank of St. Louis
Unconventional monetary policies revisited, (Part I), Biagio Bossone
The 2009 - 2013 Corporate Bond Issuance Global Frenzy: what role for US Quantitative Easing, Marco Lo Duca, Giulio Nicoletti, Ariadna Vidal Martinez European Central Bank
5. Investors pour into European property, Financial Times
6. Role and Operations of the Troika - EU Parliament enquiry report (draft)