Tuesday, August 22, 2017

Mario Draghi defying market opinion

Mario Draghi defying market opinion and continues the program of QE

As the head of the European Central Bank
Mario Draghi during his speech at the IMF headquarters, incentive program
EU economy will continue, despite the reaction of the markets. "The ECB will buy
so long bonds as necessary to fully achieve the objectives".
- Draghi said. He also noted that the program has already shown pretty good
results despite skeptical forecasts of many experts.


This is what Mario Draghi said in his speech: "we
We are seen how much influence our actions on the value of assets and the level of
economic confidence. Moreover, we
see our intervention equivalent effect on the level of investment,
consumption and inflation. That is why we will carry out the purchase of bonds,
until we fix a stable rate of inflation adjustments. After seven years of debilitating crises
European companies and households are reluctant to take on the economic risk.
For this reason, it takes some time before we can talk about
the success of our program".


I must say that most experts last months
It said that the effect of the quantitative easing program has exhausted itself on
bonds, stock indexes and currencies. One of the main reasons for this - compression
liquidity. Wherever the QE program was carried out, there is a problem with
liquidity - in particular this applies to Japan, but even in the US was problematic
trade large sums. On the liquidity squeeze in the euro zone debt market,
by the way, has already reported many financial institutions.



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