Once again Germany’s Bundesbank is jawboning against ECB bond purchases. While I understand that it is essential for struggling economies to fix their structural problems, at this point in the game it is obvious that the ECB must actually act like a central bank is supposed to act, and address the overall funding issues of its constituents. Just the improved confidence from Mario Draghi’s comments to do whatever it takes has reduced bond yields on Spanish and Italian debt, which ultimately reduces overall government funding costs. Confidence is a huge issue and while Germany seems to being pushed towards taking some type of action, these constant reminders of the turmoil within the Euro-zone only serve to delay the ultimate recoveries of the economies within the region.
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