03/13/2016 - Yra Harris: Draghi Is Leveraging Policies To Bailout The European Banking System

Draghi Fires A Water Pistol At Global Liquidity
To Bailout The European Banking System
& Indebted Eurozone Governments

“After the smoke had cleared from ECB’s announcement to cut the deposit rate another 10 BASIS POINTS to NEGATIVE FORTY, the central bank ADDED MORE MONEY TO THE SYSTEM VIA AN INCREASE IN QE TO EIGHTY BILLION EUROS A MONTH. The press called this a BAZOOKA but I THINK IT IS A WATER PISTOL .. The ECB is going to pay banks MAYBE 40 basis points to take money and lend it out to borrowers .. The domestic banks in each nation can buy their government’s debt and under the CURRENT BANK FOR INTERNATIONAL SETTLEMENTS (BIS) RULES government debt is given a zero-weighted risk so sovereign debt does not require holding reserves to offset the liability of lending to the government. DRAGHI IS TRYING TO BAIL OUT THE BANKS THROUGH THE BACK DOOR. As I wrote yesterday, the NON-PERFORMING LOANS ON THE BOOKS OF ITALIAN BANKS ARE CONSERVATIVELY ESTIMATED AT 16%. Do you really think that the battered Italian banks are in a hurry to make more loans to zombie firms or will they take the zero-priced money and load up on Italian 10-year notes that yield 150 basis points? .. DRAGHI IS TRYING TO LOAD UP THE ECB WITH DEBT THAT WILL BE SECURED WITH THE GERMAN CREDIT CARD.”
– Yra Harris

LINK HERE to the article

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