Image: © European Central Bank via Flickr

Europe’s central bank has finally stopped ‘quantitative easing’

Now we can all stop trying and failing to even pronounce the thing, let alone understand it

Draghi, the President of Europe's central bank (the ones that print the money and control the interest rate, among other things), seems to feel Europe's on the up – so he's stopped pumping money into it.

What it means: Trying to learn how to say 'quantitative easing'  is like learning how many 'na's there are in banana before it's time to stop all over again.

'Quantittatitative easing', or 'quantitative easing', is the policy whereby central banks buy up what are essentially like shares in a government, called 'bonds', from banks. If banks have more $$, they can lower interest rates (because they're already getting enough from the bond sales). That makes it cheaper to borrow money, and the hope is people will end up spending more (because money is 'cheaper' as a result of all this).

The UK, US, and EU all did it after the crash, but it was all very controversial and the UK and US have already stopped the policy. The ECB has just followed suit yesterday – until now, they've been buying €30bn worth of bonds from banks per month; they're lowering it to €15bn and phasing it out by the end of the year.

Some people think it's a bad idea given the EU's not really sure who its friends are at the moment and an anti-EU party just got elected in Italiy. But Draghi, who runs the show, seems to think things are stable, so he's ready to stop adding that extra money into the system.

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Reader Comments

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?