Support the Wall Street Examiner! Choose your level of support to receive a free proprietary report as my thanks. Click the button below to see your options. Become a Patron!

Money For Nothing And Their Bank Deposits Are Free (And ECB Still Can’t Generate Inflation)

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

There seems to be an inability of Central Banks to generate inflation. Take Mario Draghi  and the European Central Bank.

This morning, ECB head honcho “Super” Mario Draghi pulled a Captain Obvious press conference.

(Bloomberg) — Mario Draghi signaled the European Central Bank probably won’t stop its quantitative-easing program without tapering it first, indicating that the stimulus is likely to run past the currently scheduled end-date of March 2017.

“An abrupt ending to bond purchases, I think, is unlikely,” the ECB president said in a press conference in Frankfurt on Thursday. A sudden stop “is not present in anybody’s mind.”

Thank you, Captain Obvious. None of us were expecting a sudden stop of Central Bank QE.

Europe has an inflation rate of 0.4%, below the ECB’s 2% target for inflation.


The US is having better success … at getting near 2% inflation (defined as Core PCE growth YoY). But the US is still only at 1.7% (still below the 2% target).


With low inflation and near zero cost of funding for banks, we have seen an explosion in non-interest bearing deposits at the big banks in the US.


It truly is “Money for nothing and the bank deposits are free.”

And “All Quiet on the Western Front” on inflation.


Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.