Though they never come out and say it, the growing body of evidence shows that what’s called quantitative easing (QE) is more akin to involuntary or inadvertent tightening. The implications are enormous, though still largely unexplored if not entirely misunderstood. We may now be seeing the global consequences of it currently at dollar auctions in Switzerland.
Our problem may end in dollars while transiting via the Swiss National bank, yet it begins in Italy where the ECB intends to help the most. Just a few months ago, policymakers were jarred by the rising spread between Italian government bonds and their respective German counterparts.
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