Wednesday, January 18, 2012

Link of the day

.

This helpful graph below, assists KT in explaining that while the ECB (European Central Bank) cannot print money to buy government bonds, it doesn't necessarily mean the ECB can't print money to buy government bonds.

It's all pretty simple...



A central bank acting as lender of last resort is the clearest possible signal that the country is fiscally doomed. In the case of Italy, a fiscal collapse would wreak untold havoc on the European banks who hold hundreds of billions of Euros of increasingly worthless government debt. Run by clever people, the ECB found a (temporary) way around the problem. They printed gobs of Euros and loaned them to banks at 1%. After that, it was up to the banks to do something with the cash...








See..? Who says the world's financial ills cannot be solved by going that extra mile and throwing in some multi-color charts for clarity's sake.


Read more at the link and see where Italian men have most likely gone from sipping espresso in sidewalk cafes...







.





... to doing shots of Fernet-Branca.



8 comments:

W.C. Varones said...

Hate to point this out, but our Fed has been doing both the "Bad" and the "Good" to monetize our trillion-plus-dollar government deficits.

Got gold?

K T Cat said...

Yay! A Beerolanche! :-)

Thanks, amigo. Glad you liked the post, if not the actual results of the content.

K T Cat said...

WC, you're certainly right about the Fed. It's just that the Euros are closer to the edge of the cliff than we are.

As for gold, I'm not sold on it. If I was gambling on outcomes, I'd probably go with necessary commodities.

SarahB said...

"...a flavour that's best described as being a cross between medicine, crushed plants and bitter mud." Since espresso tastes just like that too, I can't see why Italians wouldn't opt for a nice distracting buzz.

My gold money is going toward a battery bank and a well.

Dean said...

Sarah, they are going to need it.

Btw, my first exposure to Fernet Branca was as an 8 yr. old.

http://www.youtube.com/watch?v=_0QTD3uZoTI

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